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Economic conditions are some of the most perplexing to analyze in this cycle, and lately there has been a little something for the optimist and the pessimist. Why are there no real clear signals? Are we headed for a recession or not? Will inflation ease or will it get worse? The latest data from the Purchasing Managers’ Index is not great – two straight months in contraction with a current reading of 46.4.

On the other hand, the rate of durable goods orders has risen to levels not seen since last year and factory orders are up higher than any time in the last year. Retail sales are up 0.3% over last month and 1.6% above May of last year. These are actually pretty healthy numbers. The recession was predicted to start towards the end of last year but there was GDP growth of 2.6% in Q3 and 2.9% in Q4. The recession didn’t start in Q1 of this year either (up 2.0% in the third iteration).

The second quarter is expected to be close to 2.5%. Given the definition of a recession as two straight quarters of negative growth, the economy will not be in recession until the end of the year (and that assumes that numbers trend negative in third and fourth quarter).

Learn more about the Q2 2023 Construction Industry Outlook by downloading the CICPAC report below.

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