Construction slows, material costs moderate, skilled labor in demand, says JLL
The construction industry is experiencing a period of heightened activity, but tightening lending conditions and structural labor shortages are contributing to higher project costs and a slowdown in construction starts, says JLL in a new report.
Despite these increased costs, construction spending is still expected to grow this year by 6 percent, as publicly funded projects in infrastructure and manufacturing contribute to activity.
Job openings remain high in the sector and unemployment is abnormally low, conditions that have prompted significant competition for skilled workers and led to a climb in wages by 17 percent since January 2020. JLL predicts wages will continue to grow during the next months for 5–7 percent total year-over-year growth.
After the spike in material costs in 2022, commodities have fallen to a modest pace of growth, and decreasing activity in the construction sector should dampen demand and help to further moderate material costs. Howev