Insulation Outlook staff rounded up a selection of forecasts focusing on the full supply chain from our industry partners to help our readers plan and find the data that will drive today’s business decisions. Let’s take a peek at some of the predictions. For the full article, visit

1. “Construction Firms Look to Public-Sector Demand; 69% of Firms Plan to Hire in the New Year.” Author: Associated General Contractors of America (AGC)

Construction contractors are less optimistic about many private-sector segments than they were a year ago, but their expectations for the public-sector market have remained relatively bullish, according to survey results released earlier in 2023 by AGC and Sage. The findings are detailed in “High Hopes for Public Sector Funding Amid Workforce and Supply Chain Challenges: The 2023 Construction Hiring and Business Outlook.” (

2. “Study Identifies States with Best Opportunities to Cut Costs and Emissions by Updating Building Codes Using Federal Climate Funds.” Author: American Council for an Energy-Efficient Economy (ACEEE)

States could cut energy use in new buildings by as much as a third—significantly reducing utility bills and greenhouse gas (GHG) emissions—by updating building energy codes with the help of new federal funds. ACEEE identified the top 10 states best positioned to take advantage of the federal funding by analyzing several factors in each state, including energy savings achievable for new buildings under a stronger code, the pace of new building construction, and GHG emissions from buildings. The new analysis allowed ACEEE to evaluate how stronger codes could help states meet their climate targets.

The study comes as unprecedented federal resources become available to states to update

building codes. Last month, the Department of Energy announced the first $45 million of a 5-year, $225 million grant program—established by the 2021 Bipartisan Infrastructure Law—to help states and localities implement updated building energy codes. The Inflation Reduction Act will provide another $1 billion to help states and local jurisdictions adopt and implement stronger codes. The 10 states most primed to benefit from updating outdated building energy codes are Louisiana, North Carolina, Colorado, North Dakota, Minnesota, Virginia, Wyoming, Arkansas, South Carolina, Tennessee has significant building construction, and the state would see the second-highest cost savings from updating its residential energy code, as well as substantial savings from commercial building code updates. The full ranking and details for all states are included in the policy brief at

3. “Nonresidential Construction Spending Expected to Moderate through 2024.” Author: American Institute of Architects (AIA)

While spending on nonresidential construction picked up momentum toward the end of 2022, construction spending will moderate in 2023 and slow significantly in 2024, according to a new report from AIA.

Despite macroeconomic headwinds such as inflation, rising interest rates, and weak consumer sentiment scores, the AIA’s Consensus Construction Forecast panel—comprising leading economic forecasters—is projecting nonresidential construction spending to grow 5.8% in 2023 but slow to fall under 1% in 2024. Similar to 2022, growth in construction spending in 2023 will be uneven, with a projected 2.6% increase in the commercial sector, 15.1% for industrial facilities, and 4.1% for institutional buildings. In 2024, spending on commercial buildings is forecast to decline 1.4%, while industrial projects are anticipated to gain a modest 0.4%, and a 3.8% increase is predicted for institutional facilities. Complete details on the latest “Consensus Construction Forecast” can be found on AIA’s website or by visiting

4. “2023 Engineering and Construction Industry Overview.” Author: FMI Corp.

In the first quarter of 2023, much has been written about the current economic climate for the built environment. The operating conditions for many firms across our industry remain disrupted and uncertain nearly 3 years after the onset of the COVID-19 pandemic and the resulting market turmoil. We continue to see near-record inflation, with December’s consumer price index reading of 6.5% down from a mid-2022 peak but significantly higher than the prior year. Supply chains still face disruptions across global markets, and companies across sectors of engineering and construction continue to struggle to find the talent needed to execute new and existing projects. Despite these challenges, many of FMI’s clients saw record backlogs, earnings, and revenue in 2022. Total construction spending for the United States is expected to end 2022 up 8%, driven primarily by residential building, multifamily, commercial, and manufacturing.

“Obviously, there’s a lot going on in the world related to record-high inflation, supply chain challenges, [and] resource challenges, but yet, construction and building has trudged forward,” says Keith Douglas, Chief Operating Officer at Rosendin, a $2 billion, employee-owned electrical contractor. “Owners are still pushing through and wanting to build their projects, but we are starting to see some cracks out there.” Some of those cracks are projected to come from the residential market, which will be the biggest cause of a 2% forecast decline in construction spending for 2023. In contrast, other segments, such as nonresidential building and nonbuilding structures, are expected to grow in 2023, each forecast to climb 8% in 2023, meaning a large portion of the industry will continue to see growth. Excerpted with permission from “2023 North American Engineering and Construction Industry Overview To download the full report, visit 

5. 2023 Mergers and Acquisitions Trends. Author: FMI Capital Investors

Given the overall strength of the industry, mergers and acquisitions (M&A) for middle-market companies in the built environment remain relatively active. This is in contrast to larger deals and capital markets activity, which are feeling the effects of uncertainties such as recession, inflation, geopolitical risks, deglobalization, soaring deficits, and volatile financial markets.

FMI attributes this continued strength within its coverage sectors partially to the fact that its typical deal size ($40 million to $600 million in enterprise value) can often be less sensitive to global risk factors when compared to larger deals. More importantly, FMI attributes this ongoing M&A activity to favorable megatrends that are driving the long-term growth of many of its sectors. Emerging trends such as reshoring and government spending programs focused on infrastructure are also driving growth and M&A interest in many sectors of the built environment. For sectors FMI covers, including construction materials and energy solutions and clean tech, they are seeing increased government funding from bills such as the Infrastructure Investment and Jobs Act and the Inflation Reduction Act drive substantial investment and interest from private equity, pushing companies to become acquisitive to compete. Overarching and well-established trends helping to drive today’s M&A include the energy transition; labor shortages; aging owners; private equity investment; rapid technology advancement; environmental, social, and governance considerations; and deferred maintenance and underinvestment in U.S. infrastructure. View the full FMI report for insights by sector.

6. Manufacturers Concerned of Recession Threat in 2023. Author: National Association of Manufacturers (NAM)

NAM’s Manufacturers’ Outlook Survey illustrates manufacturers’ concerns around a challenging economic environment characterized by inflation, supply chain disruption, and the workforce crisis. The survey also demonstrates respondent’s concern over the consequences of Congress’s continued inaction on key manufacturing priorities. Workforce shortages ranked as the industry’s number one concern, and there were 779,000 open jobs in manufacturing in the most recent data. This is why the NAM has pressed Congress to address immigration reform—as both a humanitarian solution and to help the sector grow its talent pool—and other solutions outlined in “Competing to Win,” NAM’s policy roadmap to bolster manufacturers’ competitiveness.

Key findings from the survey include:

  • More than 62% of manufacturing leaders believed that the U.S. economy will officially slip into a recession in 2023. 
  • More than three-quarters of respondents (75.7%) listed attracting and retaining a quality workforce as a primary business challenge, with supply chain challenges (65.7%) and increased raw material costs (60.7%) the next biggest impediments.
  • Even in a recession, manufacturers plan on capital spending on new equipment and technological investments (65.3%), upskilling and training of the existing workforce (64.1%), seeing solid demand for their company’s products (63.2%), hiring new employees (55.1%), investing in research and development (52.1%), and spending on new structures and existing facilities (38.6%). 
  • More than three-quarters of respondents (75.8%) said pushing back against regulatory overreach should be the top priority of the 118th Congress. 
  • Other priorities included supporting increased domestic energy production (69.3%), passing comprehensive immigration reform (65.4%), maintaining and permanently extending tax reform (63.0%), controlling rising health-care costs (55.5%), addressing the skills gap facing manufacturers (50.5%), and modernizing permitting to reduce red tape (40%). 
  • Due to the consistent economic headwinds, manufacturers’ confidence has declined, with 68.9% of respondents having a positive outlook for their company, the lowest since the third quarter of 2020.

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7. 5 Supply Chain Predictions for 2023. Author: Logistics Viewpoints 

So much has changed in a year! While the supply chain pressures that have built up over the last 2 years continue to abate as transportation capacity problems ease and consumption shifts from goods to services, newer challenges and opportunities lie ahead. As cost pressures build up, organizations need to get creative in increasing the focus on cost optimization while ensuring resilience and business continuity. Here are five supply chain predictions about what to expect for 2023.

  • A rough start with positive signs down the road. As businesses face inflationary pressures, slowing customer demand, and a potential recession, expect the first half to be rough. Organizations will be pressured to reduce costs and do more with less. As the United States and European Union are experiencing these pressures, China will pick up some slack. 2022 saw China’s economy grow at a historically low level of 3%, owing to the zero-COVID policy and slowing export volumes. However, with the zero-COVID policy now relaxed, the GDP growth is forecasted to be 5%. The aggressive interest rate hikes by the Federal Reserve are expected to ease as the year progresses, improving predictability and helping address rising cost concerns. In a recently published survey conducted by Coupa Software (, European supply chain leaders cited the ongoing geopolitical conflict in Ukraine as a major concern. Optimists like to believe that the Russian aggression on Ukraine will not be prolonged, given the toll it is taking on the citizens of both the nations. All these factors together place the second half of 2023 in a more positive light.

  • Supply chain spending will tighten, while building resilience remains a focus. Supply chain spending—broadly categorized into operational expenses; working capital; capital investments; and maintenance, repair, and operations—will be under scrutiny. However, organizations will strategically target de-risking their supply chains by adding optionality and reducing single points of failure. With the disruptions experienced in recent years, Chief Financial Officers are now more educated in the role of supply chain in ensuring business continuity. They will be more open minded and thoughtful about resilience investments even amid budgetary constraints, as long as a valid business case exists, with specifics on how such resilience will reduce the overall risk. The aforementioned global survey by Coupa of more than 1,000 supply chain executives shows that about 80% of respondents expressed the intent to continue investing in digital technologies that bring more resilience and agility.

  • Proven technology solutions will gain ground as hype gets filtered out. Supply chain technology that offers hype but is not backed with solid, proven capabilities will get filtered out. Meanwhile, tech that solves the practical and the most pressing problems businesses experience will strengthen their hold, especially as companies look to invest more in solutions that help optimize business spend while building resilience. The solutions that focus on delivering efficiencies and cost savings will gain ground. As budgets get pressured, organizations will be much more thoughtful in surgically targeting investments that deliver measurable benefits.

  • Human-artificial intelligence (AI) collaboration picks up momentum As organizations look to do more with less and make their workforce more productive, they will continue to prioritize AI that assists humans cognitively and physically. Accelerating investments in smart robots that bring goods to people will reduce repetitive work in warehouses. Decision support systems will serve up insights to human decision makers at the point of decision. On the topic of human-AI collaboration, it would be remiss not to address the topic of generative AI. This very specific application of AI, wherein AI generates entirely new content based on human prompts, has entered the mainstream consumer arena. The recent excitement around OpenAI technologies such as ChatGPT and Dall-E illustrate this trend. However, their usage is expected to be limited in the business arena through this year, barring some niche areas such as content creation in marketing, where such technologies can assist humans. However, it is worthwhile for leaders to keep tabs on how these technologies evolve through the rest of 2023.

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