Contract Surety

Inflation Cooling But Material Costs Rising



These are the predictions of analysts based on a new global construction report from Linesight. Overall, although it is anticipated that the construction industry will experience contraction from 2023-2026, expectations remain high that public spending on infrastructure will be a bright spot.


Perhaps Not Surprising…

Based on the Q4 Commodity report from Linesight, Construction Pros reports “high input costs, rising interest rates, inflationary pressures and supply chain issues” are hampering growth, but infrastructure builds will ease the pains of contraction. Specific predictions include:


  • Economic slowdown is expected to continue into 2023
  • Inflation is cooling off (6.2% in 2022) but will remain higher than normal, with an average of 4.7% expected for 2023, and will continue to push wages higher
  • The rate of unemployment is low, but is expected to increase in the next few months due to lower economic sentiment and reduction in spending, though this should not affect the cost of labor for mission-critical and life sciences work, where a shortage of skilled labor will continue
  • From an equipment standpoint, short supplies of electrical steel are causing issues with transformers
  • Rising demand for aluminum, copper, and nickel will drive prices up on electrical and construction projects
  • Interest rates and recession fears may apply downward pressure on copper prices in the short term, but this will be offset by investment in the transition to clean energy


While business owners need to monitor the external factors that get in the way of profitability, they don’t have to lose sight of growth. These days it’s wise to follow the flow of money for publicly funded builds and nonresidential builds. Successful builders also underscore the importance of really setting aside time for relationship building. Relatedly, it’s likely time to change up your social media strategy. You’ll find additional tips on growth strategies, including bidding more, right here.


Colonial Surety is ready to help builders increase profitability too, via The Partnership Account for Contractors®. Get free insights and financial scores just for completing the pre-qualification. Then, once qualified, The Partnership Account  provides builders with a surety line of credit—in writing—and a private digital dashboard. Use it to access real time financial intel, including a day to day snapshot of single and aggregate limits and current and available bond capacity. Go ahead: update work on hand, increase your aggregate and move that next project forward. Get started right here, now: Pre-Qualify and Get Free Scores


Contraction With A Sunny Side Up?

Despite predictions of a slow down, it remains quite possible for contractors to bob and weave their way to growth. Don’t forget, many inspiring “surviving and thriving stories” among builders can be traced to the Great Recession. When plotting growth strategies with contract partners, Philip Shepard, Head Underwriter at Colonial Surety, encourages a focus on working capital vs carrying debt. Though debt is a tactic often used to dilute net earnings and reduce taxes, it ultimately impedes growth, by diminishing working capital and weakening the capacity of contractors to secure larger bonding lines.While positioning your business to win, also keep in mind that there remains a sunny side up to construction forecasts, as Linesight executive Patrick Ryan explains: “While demand for most key commodities in the United States is expected to ease in the coming year, rising input costs, high energy prices and other challenges are expected to offset this. On the bright side, investments by the government in housing, transportation and manufacturing through 2026 should stimulate growth at an average annual rate of 3.7%.”


Got a special opportunity coming along? Let’s connect—that’s what partners are for, right? The Partnership Account for Contractors® helps contractors grow strategically, one win at a time, via:


  • Control of bidding and bonding, online and in real time.
    • Powers of attorney to seal and issue their own bid bonds—in minutes.
    • Fast, direct, confidential bid bonds—no middleman.
    • Direct access to performance and payment bonds on a customized dashboard.
    • Real time tracking of bids and work on hand.
    • Immediate access to Colonial’s lead underwriter as new opportunities emerge.
    • A private Owners Dashboard to view surety lines, adjust work and analyze bids.

Pre-Qualify and Get Free Scores Here.


Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed. Let’s connect today: LinkedIn!