Construction spending growth nearing end of the line in United States
What you will learn:
- Oxford Economics’ new proprietary business cycle indicator shows that real US construction spending is firmly in a decelerating growth phase. Strategically important sectors have had mass investment in recent years, but that phase is reaching a natural peak, and the impact of interest rate cuts will not be felt immediately.
- Manufacturing and infrastructure projects have seen large investments and are still growing solidly. Funding from the Inflation Reduction Act and CHIPS packages means there is still room to run and projects are breaking ground, however, the pace of new construction is unlikely to be maintained indefinitely.
- Receding inflationary pressures and further rate cuts will begin to support single family residential construction, but mortgage rates remain elevated and interest rates will need to fall further before private investment returns.
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