What's Happening?
The construction industry is navigating a complex landscape influenced by tariffs, labor shortages, and legislative impacts. The One Big Beautiful Bill Act (OBBBA) has reinstated 100% bonus depreciation for qualified property, offering opportunities for improved cash flow. However, construction spending in the U.S. has been declining since its peak in 2023, with cost uncertainty and shifting demand contributing to a slowdown in the commercial construction sector.
Why It's Important?
The construction industry's response to these challenges will significantly impact economic growth and infrastructure development. The reinstatement of bonus depreciation under the OBBBA provides a financial incentive for companies to invest in new projects, potentially offsetting some of the negative effects of tariffs and labor shortages. However, the industry's ability to adapt to these changes will determine its long-term sustainability and competitiveness.
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