{"id":26900,"date":"2025-10-17T11:16:11","date_gmt":"2025-10-17T15:16:11","guid":{"rendered":"https:\/\/www.construction.com\/?post_type=blog&p=26900"},"modified":"2025-10-17T11:16:11","modified_gmt":"2025-10-17T15:16:11","slug":"stagflation-what-it-could-mean-for-construction-and-surety-markets","status":"publish","type":"blog","link":"https:\/\/www.construction.com\/blog\/stagflation-what-it-could-mean-for-construction-and-surety-markets\/","title":{"rendered":"Stagflation: What It Could Mean for Construction and Surety Markets\u00a0"},"content":{"rendered":"

Originally published as <\/span><\/i>\u201cThe Specter of Stagflation\u201d<\/span><\/i><\/a> on NASBP by Dodge Chief Economist Eric Gaus<\/span><\/i><\/p>\n

Economic uncertainty continues to shape the construction landscape. While the baseline outlook still anticipates modest growth, the risk of stagflation \u2014 slowing growth paired with elevated inflation \u2014 remains real. <\/span>\u00a0<\/span><\/p>\n

Here are the five key takeaways for construction and surety professionals to keep on their radar:<\/span>\u00a0<\/span><\/p>\n

    \n
  1. S<\/strong>tagflation is not the base case \u2014 but it\u2019s a credible risk.<\/span><\/b>\u00a0<\/span><\/li>\n<\/ol>\n

    Current inflation rates have proven sticky, and GDP growth is softening. While Dodge does not forecast stagflation as the most likely scenario, the risk has grown enough that contractors, sureties, and project owners should be monitoring early indicators closely.<\/span>\u00a0<\/span><\/p>\n

      \n
    1. A stagflation scenario would slow private construction activity.<\/span><\/b><\/span><\/li>\n<\/ol>\n

      Tighter credit conditions, rising costs, and reduced consumer demand would likely <\/span>weigh most heavily on residential and private commercial projects, delaying <\/span>starts and compressing margins.<\/span>\u00a0<\/span><\/p>\n

        \n
      1. Institutional and public work could remain more resilient.<\/span><\/b><\/span><\/li>\n<\/ol>\n

        Government-funded infrastructure programs may provide a buffer. These projects often move forward even in challenging economic climates, helping stabilize parts of the industry.<\/span>\u00a0<\/span><\/p>\n

          \n
        1. Surety markets would see increased exposure.<\/span><\/b><\/span><\/li>\n<\/ol>\n

          In a low-growth, high-inflation environment, contractor defaults typically rise, m<\/span>aking accurate risk assessments and portfolio diversification more critical for surety providers.<\/span>\u00a0<\/span><\/p>\n

            \n
          1. Proactive planning is the best defense.<\/span><\/b><\/span><\/li>\n<\/ol>\n

            Contractors and sureties that monitor cost pressures, diversify across project types, and build flexibility into contracts will be better positioned to weather potential economic shocks.<\/span>\u00a0<\/span><\/p>\n

            Why It Matters<\/span><\/b>\u00a0<\/span><\/p>\n

            Even if stagflation doesn\u2019t materialize, planning for it strengthens operational resilience. For construction stakeholders, that means sharpening risk management strategies, keeping an eye on inflation indicators, and understanding how shifting macroeconomic conditions ripple through the project pipeline.<\/span>\u00a0<\/span><\/p>\n

            Read the original article on NASBP:<\/span><\/i> The Specter of Stagflation<\/span><\/a>\u00a0<\/span><\/p>\n

            \u00a0<\/span><\/p>\n","protected":false},"featured_media":26901,"template":"","class_list":["post-26900","blog","type-blog","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nStagflation: What It Could Mean for Construction and Surety Markets\u00a0 | Dodge Construction Network<\/title>\n<meta name=\"description\" content=\"Discover how the U.S. government shutdown impacts the building materials industry\u2014from stalled federal projects and delayed permits to supply chain disruptions and contractor cash flow challenges. 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While the baseline outlook still anticipates modest growth, the risk of stagflation \u2014 slowing growth paired with elevated inflation \u2014 remains real. \u00a0 Here are the five key takeaways for construction and...","_links":{"self":[{"href":"https:\/\/www.construction.com\/wp-json\/wp\/v2\/blog\/26900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.construction.com\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/www.construction.com\/wp-json\/wp\/v2\/types\/blog"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.construction.com\/wp-json\/wp\/v2\/media\/26901"}],"wp:attachment":[{"href":"https:\/\/www.construction.com\/wp-json\/wp\/v2\/media?parent=26900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}