Foundation report reveals challenges in US construction industry

An increasingly complex environment of continuous change and multiple challenges has contributed to the mixed outlook for the US construction industry. In 2024, factories, bridges, and roads are expected to be the winning sectors, while warehouse and office construction will be challenged, according to a new study, “Vertical Market Outlook Series: Construction,” released by the Equipment Leasing & Finance Foundation (Foundation).

The study provides an overview of the US construction industry addressing such topics as macroeconomic factors, technological innovations, and other developments that will impact the industry going forward. The report is the 11^th release of the Foundation’s forward-looking Vertical Market Outlook Series and is designed to help readers recognise and understand opportunities and challenges that may affect their businesses.

Will Tefft, Foundation Research Committee Member and Equipment Manager – EverBank Corporate Asset Finance, said:

“The construction industry is consistently among the top end-users of equipment finance, and construction equipment a top-financed asset category, so this study should be of interest to a wide swath of our industry.”

“Equipment finance professionals will find the broad range of topics examined insightful for use in their strategic planning, and as a guide to the trends and issues to monitor to benefit their customers.”

The report was commissioned by the Foundation and prepared by global advertising, technology, and data company Big Village, which also produced the previous studies in the Vertical Market Outlook Series. The new study presents data and research from a variety of sources, and examines a range of issues, including:

Government infrastructure investments through legislation such as the Infrastructure Investment and Jobs Act (IIJA)
Economic factors such as high interest rates and inflationary pressures that can increase equipment, material, and labor prices
Labor shortages/rising labor costs
Pressure from both regulations and customers to implement decarbonization and environmentally-friendly practices
Tighter lending standards, lower risk tolerance by lenders, and increased financing costs
Options for acquiring equipment
High levels of construction bankruptcies and loan delinquencies
M&A activity with a trend toward private equity firms purchasing construction and construction-related companies
Investment in technologies including, AI & big data innovations, automation/digitization/internet of things (IoT)/augmented reality, building information modeling, cloud-based technology, additive manufacturing/3D printing, drones/aerial imaging, and new battery technology.

Download the full report at https://www.leasefoundation.org/industry-resources/vertical-outlook/.