An increasingly complex environment of continuous change and multiple challenges contributes to the mixed outlook for the U.S. 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.
“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,” Will Tefft, foundation research committee member and equipment manager – EverBank Corporate Asset Finance, said. “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
- Economic factors such as high interest rates and inflationary pressures that can increase equipment, material and labor prices
- Labor shortages and 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 and 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.
