Over the last few years, our industry has experienced a whirlwind of change, facing social volatility, credit illiquidity, supply chain hurdles, and labor shortages. These difficulties have certainly been significant, but I remain optimistic about what lies ahead. It's more of a 'rebirth through challenges' as our resilience becomes clear, and the outlook for the coming year is encouraging. With strategic planning, investment in workforce development, and adaptability to market conditions, we can confidently steer through the future. 

The industry's resilience can be attributed to strong consumer confidence, a robust labor market, and significant public funding for manufacturing and infrastructure. As interest rates stabilize and possibly decline in the fall, the residential sector is likely to revive. The Federal Reserve’s projections indicate a gradual reduction in inflation, which is encouraging for the construction industry.

In 2025 and 2026 we forecast the pipeline of loan sales and properties that have gone through a basic reset to reinvigorate the TI and rehab market. We are starting to see our larger private clients leaning in, so it is our prediction that the construction cost will reach its lowest points this summer and material costs will start to increase with inflation in 2025.

Technological advancements are set to revolutionize the construction industry. The integration of AI, drones, and advanced software enhances everything from 3D modeling and design processes to scheduling and safety compliance. These tools will continue to evolve, providing significant advantages to early adopters. By leveraging these technologies, construction companies can improve efficiency, sustainability, and readiness for future challenges.

However, significant challenges remain. The industry faces a critical shortage of skilled labor, with an estimated need for more than 330,000 new workers in 2024. Recruiting qualified workers continues to pose a challenge, as many public and infrastructure projects have absorbed the highest quality labor pools. However, we are beginning to see an increase in available labor as the private sector backlog has diminished over the past twenty-two months. For the remainder of 2024 and the first half of 2025, we forecast that private sector labor will become more available, pending an uptick in work resulting from a potential real estate reset within the lending industry.