Dodge Construction Network forecasts that overall US construction starts will remain steady in 2023 at $1.08 trillion due to the confluence of housing demand and an impending recession brought on by the Federal Reserve’s fight against inflation.
It stated this week during its 2023 Dodge Building Outlook that the total number of construction starts will decrease by 3% when adjusted for inflation. Dodge Construction Network’s chief economist, Richard Branch, stated in prepared remarks, “The economy is slated to significantly slow, unemployment will edge higher, and for parts of the construction sector it will feel like a recession.”
They also predicted a decline in the multifamily sector, which it claimed has benefited from the single-family market’s problems with affordability by seeing higher demand and record-low vacancy rates.
“The softening labor market and investment outlook will eat away at these gains in 2023,” according to Dodge. “While the dollar value of multifamily starts will rise a scant 1% (-7% when adjusted for inflation), units will fall 9% to 723,000.
