Construction and demolition contractors and companies are looking toward 2023 as the year when they can truly put the effects of the COVID-19 pandemic behind them.
The construction and demolition (C&D) outlook for the rest of 2022 suggests a 5.4% increase in spending for non-residential (commercial and industrial) projects for the year. 2023 will see more growth, with an expected 6.1% increase. With declines in investment in 2020 and 2021, this turnaround is a positive signal for construction and demolition companies and the industries that rely on them.
However, the construction and demolition outlook for the coming year will also be facing some challenges. Persistent supply chain issues and the increasing costs of materials mean it will not be 100% smooth sailing for the industry. At the same time, trends in green building and recycling to counter inflation-fueled price increases will provide opportunities to change in positive ways.
What’s the Pacific Northwest’s Demolition Outlook?
Inflation and supply chain issues will stubbornly hang on early in the year, but there is a reason for optimism in 2023 as the C&D industry demonstrates its resilience and embraces change.
Supply Chain Issues Will Challenge Demolition Contractors
Supply chain issues will continue to be a problem for Oregon’s C&D industry in 2023.
In addition to shortage and delay in construction material supply, equipment manufacturers could struggle to get the components necessary to make new machinery and tools. Even if the situation improves, the increase in demand driven by new construction activity will still cause a strain on the supply chain system.
Inflation Isn’t Going Away Any Time Soon
Just like with other industries, inflation will take a toll on construction and demolition.
Input prices for the industry will rise by 24.4% (year-on-year) by February 2023. Demand will also grow, but the weakening purchasing power due to inflation could cancel out the growth, leading to so-called stagflation. Stagflation occurs when higher costs slow growth, leaving an economy that is neither improving nor slipping into recession.
The good news is that prices in commodity futures markets are slipping, signaling that prices could ease in the long term.
Green Construction Trends Are On the Rise
The U.S. market for green building is expected to reach nearly $100 billion in spending by 2023—and shows no signs of slowing. This eco-friendly drive in construction and demolition is changing the priorities of both contractors and their clients.
Developers and the construction industry as a whole are seeking to reduce their carbon footprints. Rehabbing old structures and efficient building management are also emerging trends in the coming year. Construction companies are also seeking sustainable and recycled materials to qualify for green certifications, such as LEED.
The demolition companies in Portland and beyond can play a pivotal role in these efforts as they reclaim and process materials from old buildings to use in new projects.
Contact Our Demolition Company Today
Elder Demolition offers a full range of services that can help you take advantage of the positive construction trends and deal with the cost and supply chain challenges of 2023.
Our demolition company knows to reduce your costs through asset recovery, scrap metal demolition, concrete recycling, and steel reprocessing. Contact us to discuss your demolition, asset recovery, materials recycling, and reprocessing requirements.