July 30, 2021 1
July 2021 Construction Cost Outlook and Forecast
July-2020 POST-FORECAST REVIEW:
The Ohio DOT Construction Cost Index measured inflation for FY2021 at -2.1%1. In July 2020, we
forecast Ohio DOT’s FY2021 construction cost inflation would be 0.0%. Consequentially, actual inflation was 2.1% lower than predicted. Figure 1 illustrates the overall downward construction inflation trend since June 2019. Year-over-year declines in asphalt and structures are the most significant factors that lowered overall inflation in FY2021. The COVID-19 pandemic affected all aspects of construction in 2020. We expect the pandemic to continue affecting construction through 2022 as well.
Figure 1
July-2021 FORECAST OVERVIEW:
The Ohio DOT Construction Cost Inflation Forecast is presented in Table 1. We predict construction cost inflation to be 5.1% in FY2022, increased from 2.2% forecast in July 2021. Inflation is expected to be 3.7% in FY2023; 2.1 % in FY2024; 2.0% in FY2025; and 2.3% in FY2026. From FY2027 through FY2031 inflation is forecast to be 3.0%, based upon average rates over 30 to 60 years as measured by the GDP deflator and the Consumer Price Index (CPI). The long-term forecast beyond CY2031 is 2.0%, based on the Federal Reserve’s long run inflation target rate.
Table 1: July 2021—5-YEAR CONSTRUCTION COST INFLATION FORECAST
FY2022 FY2023 FY2024 FY2025 F2026
High 7.5 6.7 5.7 4.0 4.3
Most Likely 5.1 3.7 2.1 2.0 2.3
Low 3.0 2.0 1.0 0.5 0.7
The following is a narrative of major factors that will have an influence on construction costs through the forecast period: (1) economic activities globally, nationally, and throughout the state and (2) regional construction costs for labor, oil and diesel, liquid asphalt, and steel, among others.
1 Ohio DOT Construction Cost Index published July 15, 2021
104.6 101.0 105.3 108.7 107.4 106.5 110.2 115.2 113.2 114.6 112.2 100 105 110 115 120
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The Ohio DOT Construction Cost Index
Ohio DOT Construction Cost Change Over Time
July 30, 2021 2 STATE & NATIONAL ECONOMIES:
The Ohio and US economies continue to be impacted by the Covid-19 pandemic. The current economic outlook is a blend of jubilant optimism tempered by the realization that the pandemic is far from over. With vaccines available to all who want them in the US, infection rates are low across the country leading to the removal of masking and distancing mandates along with most domestic travel restriction. People are feeling freer to visit surviving local brick and mortar retailers and local bars and restaurants. The travel industry along with the leisure and hospitality sectors are also ramping up to accommodate people as they once again trek around the country. Remarkably, international trade has continued despite the ups and downs of sporadic Covid-19 shutdowns around the globe. However, the pandemic is far from controlled in most places in the world and the specter of the “Delta Variant” is cause for concern in the US as well.
The Moody’s Analytics and CNN Business “Back-to-Normal” index has the US economy at 92% of pre-pandemic levels and Ohio’s at 94%.2 Consumers are currently making a shift back to purchasing more
services. At the same time consumer demand for goods remains robust. Businesses are also spending on computers, machinery and software with nondefense capital goods orders well above pre-pandemic levels.3 The manufacturing sector which has an outsized importance in Ohio is at historically high
activity levels.4 All this good news is tempered by supply-chain problems, transportation bottlenecks,
rising material costs, and labor shortages. Automobile production, in particular, has been stymied by computer chip shortages. At a time of high consumer demand, new vehicles available for sale in May was half of what it was 13 months earlier. Dealer lots and show rooms are nearly empty.5 We also need
to remember that many businesses closed permanently over the last 16 months, and many people remain under-employed or without work despite our resurgent economy.
Looking broadly at the national construction market, construction employment for both the US (-1.8%6)
and Ohio (-2.3%7) are below prepandemic levels. However, total construction spending is above pre
-pandemic levels, 8 but the growth is not evenly split between residential and non-residential
construction. Residential construction is up compared to pre -pandemic levels9 while non-residential
construction is down.10 The Architecture Billings Index (ABI) reports increased activity for all sectors of
2 Moody’s Analytics and CNN Business, The Back-to-Normal Index, https://www.cnn.com/business/us-economic-recovery-coronavirus. Accessed July 2,
2021. The Back-to-Normal Index is a proprietary measure of economic activity updated daily.
3 Cambon, Sarah Chaney, “Capital-Spending Surge Further Lifts Economic Recovery,” Wall Street Journal Online, June 27, 2021 9:00am ET. Accessed July 1,
2021, https://www.wsj.com/articles/capital-spending-surge-further-lifts-economic-recovery-11624798800
4 Lahart, Justin, “Manufacturers’ Good Problems,” Wall Street Journal Online, July 1, 2021 1:18pm ET. Accessed July 1, 2021,
https://www.wsj.com/articles/manufacturers-good-problems-11625159922
5 Colias, Mike, Ben Foldy, and Nora Naughton, “Empty Lots, Angry Customers: Chip Crisis, Throws Wrench into Car Business,” May 13, 2021 8:42am.
Accessed July 15, 2021, https://www.wsj.com/articles/empty-lots-angry-customers-chip-crisis-throws-wrench-into-car-business-11620909719
6 U.S. Bureau of Labor Statistics, All Employees, Construction [USCONS], retrieved from FRED, Federal Reserve Bank of St. Louis;
https://fred.stlouisfed.org/series/USCONS, July 9, 2021. [7,417,000 May 2021 / 7,557,000 March 2020]-1 =
7 U.S. Bureau of Labor Statistics, All Employees: Construction in Ohio [OHCONS], retrieved from FRED, Federal Reserve Bank of St. Louis;
https://fred.stlouisfed.org/series/OHCONS, July 9, 2021. [224,400 May 2021 / 229,500 March 2020] -1 = -2.3%
8 U.S. Census Bureau, Total Construction Spending: Total Construction in the United States [TTLCONS], retrieved from FRED, Federal Reserve Bank of St.
Louis; https://fred.stlouisfed.org/series/TTLCONS, July 11, 2021.
9 U.S. Census Bureau, Total Construction Spending: Residential in the United States [TLRESCONS], retrieved from FRED, Federal Reserve Bank of St. Louis;
https://fred.stlouisfed.org/series/TLRESCONS, July 12, 2021. Residential construction spending increased from $626,581 Million in March 2020 to $760,730 Million in May 2021.
10 U.S. Census Bureau, Total Construction Spending: Nonresidential in the United States [TLNRESCONS], retrieved from FRED, Federal Reserve Bank of St.
July 30, 2021 3 design work. As a leading indicator for non-residential construction, the ABI is a predictor of construction activity levels 9 months in the future.11
Thus, nonresidential construction activity may soon be moving higher. We don’t foresee a return to pre-pandemic levels for a year or two due to structural changes in our economy. While the construction sector may not be directly impacted by these structural changes, it has and will continue to be impacted by changing demand for what is built. Some structural changes are already apparent like more data and distribution centers to support online activities and home delivery of goods. Other trends will take years to become fully realized, like how much working from home will be both demanded and tolerated by employees and their employers. Working from home leads to questions of how much office space is needed as well the type and extent of transportation services that will be demanded within a given market. Given that these and other transformative structural changes take time to evolve, the ir impacts on US construction activity, in general, and ODOT’s construction program, in particular, are expected to occur late in the forecast period at the earliest.
For now, the construction sector both nationally and in Ohio is having similar challenges to what businesses in many other sectors are reporting. In particular, Ohio DOT contractors are reporting shortages of the following products: polyethylene – cable wire insulation; polypropylene – conduit and pipe; epoxy resin – gravity fed resin for bridge sealing, pavement markings, & intermediate coat bridge paint; wood products – wood utility poles, and steel products – welded wire fabric, reinforcing bar & steel strand. Steel prices are at historic highs which will be discussed in detail in a follow ing section. Shortages of polypropylene, polyethylene and epoxy resin products were primarily caused by February’s winter storm that hit Texas and Louisiana knocking out power and subsequently shutting down
production facilities. It has taken several months to restart those facilities, while international supplies were delayed when caught in shipping bottlenecks around the world.12 Over the next six months,
material prices for polyethylene, polypropylene, epoxy resin, and wood products will be at elevate d prices due to short supplies. However, today’s shrinking lead-times and overall availability reflect a stabilizing market for these products.
INTERNATIONAL ECONOMY:
International economic growth is expected to recover somewhat in 2021-2022. National economies are still adjusting to pandemic conditions. Uncertainty, demand fluctuations, transportation disruptions and supply shortages are emblematic of the mid-pandemic economy. Canada, Western Europe, China, and Mexico are expecting GDP recoveries of between 2.3% and 8.2%.13 Countries with easier access to
vaccines are more likely to restart sectors of their economies, while countries with less access to vaccines and will take longer to recover.
Canada and Mexico, the closest trading partners with the U.S. are enjoying healthy cross border commerce. Canada’s GDP is expected to grow by 5.0% this year, compared to last year’s contraction of
11 AGC Data Digest, Vol. 21, No.24 June 18-24, 2021. Total Construction Spending in the US was $1,507,058 Million in March 2020 and $1,545,272 Million
in May 2021.
12 Shipping bottle necks during the first half of the year included the 6 days in March that the Suez Canal was blocked, backlogs at the Port of Los Angeles
and Long Beach, and an abundance of goods being shipped leading to more containers and more ships. Ir win, Neil, “Markets Work, Untangling the Global Supply Chain Takes Time,” The New York Times, June 29, 2021. Accessed 1 July 2021, https://www.nytimes.com/2021/06/29/upshot/markets-work-but-untangling-global-supply-chains-takes-time.html
13 International Monetary Fund, “Real GDP growth”, July 14, 2021,
July 30, 2021 4 4.5%. Trade with the U.S. has returned to 2019 levels.14 This is a strong signal of economic recovery
despite the border remaining closed to nonessential traffic. If travel restrictions are lifted, we expect other economic segments to rise as well. Trade with Mexico has also recovered to 2019 levels,15 boding
well for the future. The IMF expects Mexico’s GDP to rise by 5% this year.
Ramping up vaccinations, Europe is expected to see 4.8% GDP growth this year, over the 7.8%
contraction in 2020.16 Europe’s economic recovery is expected to be driven by lifted travel restrictions
and rising industrial demand. We expect to see similar economic and construction growth in the Eurozone through 2021.
China is predicted to have an annual GDP growth of 8.4% for 202117, driven by pent up demand and
retail exports. Transportation disruptions and shipping container shortages pose the greatest risk to continued economic recovery. Domestic heavy construction in China will begin to rebound with finished product exports expected to be the focal point on growth.
Brazil is expected to require a longer recovery time. COVID-19 has tragically hit Brazil hard, with more than half a million dead.18 The virus must be further contained before an economic recovery can
proceed. The IMF expects Brazil to have 3.7% GDP growth in 2021, though any gain would help after a catastrophic drop of nearly 30% between 2019 and 2020.19
KEY CONSTRUCTION INPUT TRENDS:
LABOR: The construction industry continues its struggle to hire qualified laborers despite plenty of job openings and a relatively high unemployment rate for experienced construction laborers. This in turn has impeded a more robust recovery in construction employment while inducing higher wages. This situational dilemma is anticipated to abate somewhat as pandemic restrictions and unemployment supplements are curtailed. The number of available job openings in construction was recorded at 331,000 in May20 while construction unemployment currently stands at 7.5%.21
Nationally, construction employment remains down 238,000 jobs or 3.1% from the peak set prior to the onset of the pandemic, but is up 3.3% year-over-year in June.22 Ohio’s construction unemployment
followed a similar trajectory by being down 8,100 jobs or 3.5% from its peak and 5.3% higher year-over-year in June.23
14 U.S. Census Bureau, Retrieved July 14, 2021, https://www.census.gov/foreign-trade/balance/c1220.html 15 U.S. Census Bureau, Retrieved July 14, 2021, https://www.census.gov/foreign-trade/balance/c2010.html 16 Summer 2021 Economic Forecast: Reopening fuels recovery, European Commission,
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3481
17 Fitch Ratings 2021 Outlook: Greater China Sovereigns,
https://www.fitchratings.com/research/sovereigns/world-gdp-forecasts-revised-up-after-us-fiscal-stimulus-package-17-03-2021
18 Doctors Without Borders, “Preparing for a third wave as winter rolls in”, June 29, 2021,
https://www.doctorswithoutborders.org/what-we-do/news-stories/news/brazil-msf-boosts-response-covid-19-death-toll-tops-half-million
19 World Bank, “https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=BR” 20 Bureau of Labor Statistics, Retrieved July 16, 2021,
https://data.bls.gov/timeseries/JTU230000000000000JOL?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
21 Bureau of Labor Statistics, Retrieved July 7, 2021,
https://data.bls.gov/timeseries/LNU04032231?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
22 Bureau of Labor Statistics, Retrieved July 7, 2021, https://data.bls.gov/timeseries/CES2000000001?data_tool=XGtable
July 30, 2021 5 Construction laborer wages increased nationally by 3.9% to $32.86 per hour year-over-year in June24
while increasing on average by 2.6% on May 1st for Ohio DOT project laborers covered by collective
bargaining.25 It is anticipated that future wage increases negotiated for Ohio DOT project laborers will
trend above 3.0% to rival current national trends.
CONTRACTOR & SUPPLIER MARGINS: Competition levels for ODOT’s asphalt work type contracts (Figure 2) have risen from 2.8 bids per project on average in May 2020 to 3.2 bids per project on average in June 2021. Competition levels for ODOT’s bridge replacement work (Figure 3) increased sharply beginning in November 2020 rising from 5 bids per project on average to over 6.4 bids per project in June 2021. We expect competition to level off as ODOT’s capital program spending in FY2022 and FY2023 stabilize at pre-pandemic levels. If ODOT’s capital program spending increases substantially due to an infusion of federal money, competition levels are expected to decline.
The difference between the Engineer’s Estimate and the awarded bid provides a measure of cont ractor margins. Midway through fiscal year 2021, total awarded bids were 5.7% lower than the Engineer’s Estimate. For the fiscal year, awarded bids ended at 2.3% below the Engineer’s Estimate. Margins increased over the last 6 months due primarily to rapid material price increases and shortages leading to high levels of price and schedule risk. We expect risk premiums to fall as the material supply chains stabilize in 2022.
Figure 2
24 Bureau of Labor Statistics, Retrieved July 7, 2021,
https://data.bls.gov/timeseries/CES2000000003?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
25 Ohio Contractors Association Labor Bulletin, May 1, 2021,
https://ohiocontractors.org/common/uploaded%20files/pdf/OCA_LABOR_BULLETIN_6-10-21.pdf 2.0 2.3 2.5 2.8 3.0 3.3 3.5 A ve ra ge N um be r of B idd e rs
Competition for Asphalt Work-type Projects
(12 Month Rolling Average)
July 30, 2021 6 Figure 3
OIL, DIESEL & NATURAL GAS: U.S. crude oil production has risen over 11.3 million barrels per day for the first time since May 2020.26 Crude oil reserves rose for the first half of 2020 and have trended
downward since. In a reversal from the last forecast, crude oil stocks are 93.7 million barrels below last year’s reserves, currently at 445.5 million barrels.27 Our prediction that declining crude oil reserves can
be a precursor to increased prices proved true in this instance.
The EIA currently predicts natural gas prices will be above $3.00 per MMBtu. Contract prices of four-month natural gas futures were up 14.6% between June and July of this year, rising to $3.66 per MMBtu.28 The increased prices are linked to a nearly 10% spike in “cooling degree days” over the ten
-year average. The increased usage has depleted natural gas reserve s below the current five--year average.
Figure 4 shows the Energy Information Administrations (EIA’s) average retail diesel fuel forecast. Prices have been revised upwards due to increased demand. The EIA foresees diesel prices between $3.00 and $3.50 per gallon through the end of 2022.29
26 U.S. Energy Information Administration, “Petroleum & Other Liquids”, July 9, 2021,
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
27U.S. Energy Information Administration, “Short-Term Energy Outlook”, July 9, 2021, https://www.eia.gov/petroleum/weekly/ 28 U.S. Energy Information Administration, “Short-Term Energy Outlook”, July 9, 2021, http://www.eia.gov/forecasts/steo/ 29 U.S. Energy Information Administration, “Short-Term Energy Outlook”, July 9, 2021, http://www.eia.gov/forecasts/steo/
3.0 4.0 5.0 6.0 7.0 8.0 9.0 A ve ra ge N um be r of B idde rs
Competition for Bridge Replacement Work-type Projects
(12 Month Rolling Average)
July 30, 2021 7 Figure 4
LIQUID ASPHALT: Over the past fiscal year, asphalt binder prices did not decline as drastically as crude prices. Crude oil prices peaked in October 2018, crashed in 2020, and rose dramatically in the most recent quarter. Meanwhile liquid asphalt prices declined slowly and increased rapidly.
West Texas Intermediate oil prices averaged $39.17 in 2020 and began rising in November 2020. Since then, prices have risen to $71.38, an 45.1% increase.30 Figure 5 shows asphalt binder PG64-22 prices
slowly responding to those 2020 crude oil price decreases while the percent change in price of PG64-22 shown in Figure 6 shows prices rising quickly in 2021. Asphalt price increases are expected to be an inflation driver in FY22.
The Ohio DOT Asphalt Cost Index dropped 3.5% from June 2020 to June 2021.31 The past period of
relatively low asphalt prices is likely coming to an end. Demand is expected to rise, and crude oil prices are predicted to be average $72 per barrel through 2021.32
30 Federal Reserve Bank of St. Louis, Spot Crude Oil Price: West Texas Intermediate (WTI) [WTISPLC], retrieved from FRED, Federal Reserve Bank of St.
Louis; https://fred.stlouisfed.org/series/WTISPLC, July 14, 2021
31 Bid Analysis & Review Team, “ODOT Chained Fisher Construction Cost Index”, July 15, 2021: The Asphalt Series
32 U.S. Energy Information Administration, “Brent crude oil price forecast to average $72 per barrel in the second half of 2021”
https://www.eia.gov/petroleum/weekly/ $2.00 $2.50 $3.00 $3.50 $4.00
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2022 U.S. Average Retail Diesel Fuel Forecast
Actual Diesel Fuel + Taxes
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July 30, 2021 8 Figure 5
Figure 6
STEEL: Figure 7 shows commodity steel prices rising 80% from September 2020 to May 2021 (the latest data available).33 An amount substantially higher than the previous record rise of 56% that started in
2003. Anecdotal reports suggest that commodity steel prices have risen significantly over the last 2 months as well. The rise in commodity steel prices is unprecedented. Reporting in the Wall Street Journal indicates that initial increases in price were attributed to the idling of some domestic mills at the beginning of the last summer. Increased demand in late summer caught the mills off guard. Suddenly demand outpaced supply and prices rose in response. Prices have continued to rise through June.34
33 The Bureau of Labor Statistics Producer Price Index (PPI) Commodity data for Metals and metal products-Steel mill products, not seasonally adjusted
(WPU1017). Accessed 8 July 2021, https://www.bls.gov/pPI/
34 Tita, Bob, “Steelmakers Keep Old Plants Idle Despite Surging Prices”, Wall Street Journal, June 10, 2021 7:00 am ET. Accessed 8 July 2021 -
https://www.wsj.com/articles/steelmakers-keep-old-plants-idle-despite-surging-prices-11623322802. $300 $350 $400 $450 $500 $550 $600
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July 30, 2021 9
Several technologically obsolete domestic mills remain idle despite the high prices. Domestic steel firms have responded only by increasing production at their active facilities.
Imports would typically discipline prices, but foreign steel imports from Europe and China continue to be subject to tariffs implemented in 2018. Ongoing shipping bottlenecks around the world are also
increasing shipping time and raising costs for all goods including steel imports. The domestic steel makers are effectively protected from foreign competition for the time being despite the
unprecedented rise in domestic raw steel prices. In addition, Chicago steel scrap prices have increased 60% from January to July 2021.35 Steel scrap is a primary ingredient for most of the steel products that
ODOT purchases. Higher input costs will continue to drive commodity steel prices higher into the immediate future.
Commodity steel prices are not expected to continue rising past this quarter, however increased commodity steel costs will permeate all steel product prices through the end of this year and are expected to remain elevated for at least an additional 12 months. For ODOT’s contractors, long lead-times and allocated supplies from steel product fabricators are expected to continue through years end as well. Next construction season is likely to have fewer supply disruptions for ODOT’s contractors and more stable pricing.
Figure 7
35 The AMM Scrap index (formerly MNP Scrap Index) for January 2021 was $380 per ton and in July 2021 it rose to $610 per ton a 60% rise. Source: MNP
July 30, 2021 10 READY MIX CONCRETE (RMC): Ready mix concrete prices rose steadily over the past fiscal year
nationally while declining until recently in Ohio due to impacts incurred by the pandemic. Provided the number of Covid-19 cases do not spike out of control again, prices in the near term are expected to trend higher as the economy recovers.
Nationally, ready mix concrete prices continued on an upward trajectory rising 3.1% year-over-year in June following yearly increases of 4.1%, 3.4%, and 1.5% in June of 2018, 2019, and 2020, respectfully.36
Except for a decline of 7.5% in FY2021 ready mix concrete (in place) prices in Ohio also experienced increases of 0.8% in FY2018, 5.9% in FY2019, and 8.3% in FY2020. 37 A closer look at the ODOT Cost
Index Structural Concrete series revealed that prices actually declined over the first three quarters of fiscal year 2021 then slightly increasing during the final quarter. This appears to be a sign that ready mix concrete (in place) prices in Ohio are starting to rebound as impacts from the pandemic subside.
AGGREGATE: Aggregate prices rose uniformly higher nationally over the past fiscal year while
recovering in Ohio after a significant drop at the onset of the pandemic. As with ready mix con crete the price of aggregate is expected to trend higher barring an unexpected jump in Covid-19 cases.
Nationally, aggregate prices rose 4.1% year-over-year in June following similar yearly increases of 3.5%, 4.5%, and 4.1% in June of 2018, 2019, and 2020, respectfully. 38 In Ohio, prices decreased 0.5% in
FY2021 after experiencing increases of 14.7% in FY2018 and 9.1% in FY2019 followed by a decrease of 5.6% in FY2020. 39 TheODOT Cost Index Aggregate series showed prices rebounded gradually over the
last three quarters of fiscal year 2021 after a substantial drop in the first quarter. Aggregate prices also appear to be rebounding as impacts from the pandemic subside.
FUNDING:
The Ohio DOT capital program awarded just under $1.8 billion in contracts during FY2021. Annual budgets for the next three fiscal years are anticipated to be around $2.0-$2.1 billion. In the near term the budget is expected to get a boost from an increase in the number of projects being released for sale by local agencies. Secondly, as traffic volumes have ramped up earlier than expected a windfall in gas tax revenue will materialize sooner than later. Finally, any legislated federal funding/ stimulus will further bolster the budget higher.
President Biden and Senators from both parties agreed on an approximate $1 trillion dollar infrastructure agreement on June 24th. Passage of the bipartisan bill hinges on the passage of a reconciliation bill for the remainder of the President’s economic agenda. 40 Meanwhile, the House
passed a $715 billion transportation and water infrastructure bill on July 1st. 41 It remains to be seen if
either of these bills will become law. No matter what happens Congress will need to take action before the extension to the Fixing America’s Surface Transportation (FAST) Act expires on October 1st.
36 Bureau of Labor Statistics, Extracted July 16, 2021, https://data.bls.gov/timeseries/WPU13330101
37 Bid Analysis & Review Team, “ODOT Chained Fisher Construction Cost Index”, July 15, 2021: The Structural Concrete Series 38 Bureau of Labor Statistics, Extracted July 16, 2021, https://data.bls.gov/timeseries/WPU1321?data_tool=XGtable 39 Bid Analysis & Review Team, “ODOT Chained Fisher Construction Cost Index”, July 15, 2021: The Aggregate Base Series
40 Duehren, Andrew, Peterson, Kristina, and Siddiqui, Sabrina “Biden, Senators Reach Deal On Infrastructure”, The Wall Street Journal, June 25, 2021, page
A1, A4
July 30, 2021 11 SUMMARY:
Construction cost inflation is expected to be higher in the next year due to rising material, energy, and labor costs. Another contributor will be contractor and supplier margins which are expected to be higher due to increased cost and schedule risk. We expect higher than national average growth in Ohio over the next 12 months given the strength of the manufacturing sector in the US. Residential
construction activity is expected to increase both in Ohio and nationally over the next 12 months. However, non-residential construction activity will continue to lag over the next 12 to 18 months. We predict construction cost inflation in Fiscal Year 2024 through the forecast period will be more
consistent with long term averages.
