MCC Construction Zone The Construction Forecast for 2022 Looks Promising Richard P. Higgins, CPA
T
he overall forecast for the construction industry looks promising even though inflation is high, the supply chain is tight, and labor and material costs are rising. The pandemic continues to disrupt operations across all industries as another coronavirus variant comes into play.
While most sectors of the construction industry were hit hard during the pandemic, residential grew due to the high demand for housing. Home prices were inflated in 2021 to a level that has not been seen before. Even though “the construction outlook for 2022 is looking positive, the industry will face challenges,” said Anirban Basu, chief economist for Associated Builders and Contractors (ABC) and CEO of consulting firm Sage Policy Group. Basu shared his economic forecast for the industry during a webinar for ABC’s Construction Executive magazine on December 8. “I think that 2022 is going to be a very busy for construction," added Basu. "Think very long and hard before you enter into contractual obligations. Make sure you build enough margin and contingency."
“Skyrocketing home prices may also have a positive impact on the construction industry,” Basu explained. “Local governments drive much of their revenue from property taxes, and home reassessments will mean more tax base for many communities, ensuring those governments still have money available for construction projects. Plus, much of the money for government construction included in the American Rescue Plan has yet to be spent.” McCarthy.CPA
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