Look for the construction market to slow down a bit in residential and retail sectors in order to keep the entire economy healthy — that is, not too strong — according to Thomas R. Loy and Bradley K. Walker, both with FMI’s Market Research Group.
“Inflation, like a cold, is much more difficult to recover from if you wait until the symptoms develop,” they explain in FMI’s Construction Outlook report. “So Dr. Greenspan is being proactive and fighting the things that might cause inflation, such as very low unemployment. He is fighting low unemployment by increasing interest rates to cool the economy and put a few more people out of work.”