Despite a stack of evidence to the contrary, Associated Builders and Contractors Chief Economist Anirban Basu sees continued room for pessimism in his 2024 economic outlook.
According to his forecast, a recession is forthcoming in very late 2024. Having maintained that pessimistic outlook for the past couple of years, Basu has acknowledged that he’s likely going to be wrong, much like he was in 2023.
“There’s too much momentum for the economy, and until I see the stock market lose some of this value, there is so much wealth flowing in right now, the U.S. economy just cannot have a recession,” he said.
While acknowledging that his projection for 2023 missed the mark and the economy was stronger than he anticipated, he said there has been growing evidence of resurfacing inflationary pressures in the nation’s nonresidential construction segment.
ABC
However, maintaining his pessimistic viewpoint, Basu asserts that approximately two-thirds of the growth in nonresidential construction spending resulted from higher prices being charged versus greater output of delivery.
At the crux of any current economic scenario is a determination of when/if the Federal Reserve will initiate any interest rate changes in 2024. A growing number of economists, excluding Basu, suggest there may be no rate changes. That would lead the U.S. into 2025 with high-interest rates, which would likely negatively impact construction and real estate.
