Is the US Entering a Construction Recession or Boom Cycle?

In this episode of Hard Hat Chat, Justin Smith, CEO of Contractor+, and Gerritt Bake, CEO of Build PRO tackle one of the most confusing questions contractors are asking right now is the US construction industry heading into a recession, or are we standing at the front edge of a massive boom cycle?

Justin and Gerritt cut through headline noise and fear-driven predictions to talk about what contractors are actually seeing on the ground. While economists debate charts and interest rates, tradespeople are booked out for months, homeowners are struggling to find qualified contractors, and backlogs continue to grow across residential, commercial, and infrastructure work.

The episode breaks down why construction doesn’t follow the same economic rules as other industries. From housing shortages and aging infrastructure to reshoring manufacturing, disaster rebuilding, and energy upgrades, demand for skilled trades remains relentless. Justin and Gerritt explain why rising wages, labor shortages, and full schedules are signs of expansion not contraction.

They also address the real friction contractors are feeling. Higher interest rates, material volatility, permitting delays, workforce shortages, and rising overhead all create pressure even inside a boom. Through real-world examples and realistic contractor scenarios, the episode explains why pressure and opportunity can exist at the same time.

Rather than encouraging reckless growth or fear-based retreat, this conversation offers clarity. Contractors who modernize systems, price correctly, invest in teams, and build strong brands are positioned to thrive regardless of political or economic headlines.

This episode is about confidence grounded in reality and understanding why the trades remain one of the strongest sectors in the US economy.

🔧 In this episode, you’ll learn how to:

• Understand whether construction demand is actually slowing
• Separate economic headlines from jobsite reality
• Recognize the signs of a long-term boom cycle
• Adapt pricing and operations during economic uncertainty
• Prepare your business for sustained demand
• Avoid fear-based decisions that stall growth
• Position your company to win during market shifts

If you’ve been unsure whether to pull back or push forward, this episode delivers the clarity contractors need to make smart, confident decisions.

Creators and Guests

Host

Gerritt Bake

CEO at American Contractor Network

Host

Justin Smith

CEO at Contractor+

What is Hard Hat Chat: No-BS Construction Discussion with Justin & Gerritt?

Hard Hat Chat is your backstage pass to the gritty and sometimes mind-blowing world of construction. Hosted by Justin Smith, CEO at Contractor Plus, and Gerritt Bake, CEO at American Contractor Network, this show is all about keeping it real—no corporate fluff, no sugarcoating. Tune in each week for straight talk on growing a contracting business, avoiding industry pitfalls, and sharing the occasional “holy sh*t, did that really happen?” job site story. Whether you’re a seasoned pro or just getting your boots dirty, you’ll pick up hard-earned insights and a few good laughs along the way. Join us, throw on your hard hat, and let’s build something awesome.

Justin: Welcome back to Hard Hat Chat, everyone. It’s Justin Smith, CEO of Contractor+, and today we are diving into one of the most confusing and debated questions out there. Are we heading into a recession in construction, or are we at the beginning of the biggest construction boom the United States has ever seen? You can read ten articles and five will scare you to death while the other five will make you want to buy more trucks and hire six more crews.
Gerritt: It depends on the day of the week which headlines show up. Monday says the market is collapsing. Tuesday says everything is booming. Wednesday says we’re running out of housing. Thursday says homeowners are broke. Friday says the trades are the new gold rush. It’s economic whiplash.
Justin: Exactly. And contractors are standing in the middle going, “Am I supposed to panic or party?”
Gerritt: And the truth? It’s complicated. Construction doesn’t follow the same rules as the stock market. When the economy slows down, construction doesn’t just stop. Because people still need roofs. People still need HVAC. People still need plumbing when pipes burst at two in the morning.
Justin: And bigger than that America desperately needs more housing. We are millions of homes behind demand. Cities all across the country are growing. Infrastructure is aging. Factories are returning to the U.S. Roads, bridges, utilities they need upgrades. The need for skilled workers has never been higher.
Gerritt: So while some industries are shrinking… construction is stuck in fast-forward. Even when the government tries to pump the brakes, the demand keeps pushing.
Justin: The real signal isn’t price. It’s backlog. Contractors everywhere have months of work booked out. Sometimes a year. Even with interest rates being insane compared to a few years ago. If we were entering a true recession, you would see contractors begging for jobs. Instead, we’re seeing homeowners begging for contractors.

Gerritt: That’s a very different picture than fear-based headlines suggest. Yet at the same time, material volatility is still hitting everyone hard. Prices are up one month, slightly down the next, then jumping again when you least expect it. Lumber, concrete, copper, roofing shingles, electrical panels you name it.
Justin: Yeah, and homeowners never blame inflation. They blame the contractor. They don’t read supply chain reports. They just think you’re making up numbers. So even in a boom cycle, there’s tension in pricing. Contractors are trying to survive while not scaring off customers who are already anxious about money.
Gerritt: So we have this weird situation. Loads of demand. Rising costs. Higher wages. Too few workers. Too many projects waiting to start. The trades feel like they’re sprinting uphill with a tool belt on.
Justin: It feels like prosperity and pressure at the same time. And that’s why we’re tackling this topic. Because contractors deserve clarity. Because if you believe we’re entering a recession, you’ll stop investing in your business. You’ll freeze. But if you believe we’re entering a boom cycle, you’ll take calculated risks and scale intentionally.
Gerritt: Let’s break it down in simple terms. A recession means work dries up. A boom means work stacks up. And right now, work is definitely stacking up.
Justin: The shortage of housing alone proves that. Families are doubling up. Renting instead of buying. Delaying moves. Not because they want to, but because inventory doesn’t exist. The U.S. needs millions of homes. That’s a recipe for decades of construction demand.
Gerritt: Then add infrastructure bills. Billions being poured into roads, bridges, factories, clean energy, semiconductor plants. Every single one of those projects needs trades. And they don’t outsource that to another country. You can’t ship someone a bridge from China like it’s Amazon Prime.
Justin: And remember the pandemic era when everyone upgraded their homes? That wasn’t a trend that ends overnight. People discovered comfort matters. Home is the new office. The new restaurant. The new gym. The new movie theater. Houses are being transformed constantly to fit new lifestyles.
Gerritt: Repairs, renovations, additions, smart upgrades, energy improvements — that’s long-term demand. Even if the luxury projects slow down a bit, the essential work keeps going strong.
Justin: The biggest risk isn’t demand. The biggest risk is labor. We simply do not have enough licensed pros to perform the work. And that workforce shortage is the number one reason the market will continue booming. High demand plus low labor equals high opportunity.
Gerritt: If anything slows us down, it won’t be lack of customers. It will be lack of craftsmen. There’s a giant neon sign blinking above the country that says “Help Wanted — Skilled Hands Only.”
Justin: Let’s talk about mindset for a moment. If contractors buy into the recession narrative, they start making defensive moves. Cut marketing. Stop hiring. Turn down larger projects. Put growth on pause. And the company shrinks in fear.
Gerritt: But contractors who believe the boom narrative think differently. They invest in better systems. They train employees. They improve technology. They expand service areas. They hire before the need becomes overwhelming. They prepare for the wave instead of getting wiped out by it.
Justin: And here’s the thing the data is on the side of growth. Not collapse. Homeownership demand is rising. Infrastructure spending is rising. Preservation of aging buildings is rising. Disaster-related rebuilding is rising. Energy upgrades are rising. AI, robotics, smart construction tools they’re all coming into the industry to support that growth, not reduce it.
Gerritt: So if you’re listening right now wondering whether to tighten or expand… the smart answer is expand strategically. You don’t have to dump millions into scaling. But you can secure your position, modernize your systems, and get ahead of your competition before they wake up.
Justin: Think of this like the early days of the internet. The businesses that adapted early became giants. The ones who waited until the trend was obvious never caught up. In the trades, we are entering that same kind of cycle. The smart companies are already evolving.
Gerritt: So which is it? Boom or recession? The truth may surprise some people. We are in a recession for unskilled labor. But we are in a massive boom for skilled labor. The trades are the strong side of the economy right now.
Justin: So if you’re worried about what’s coming next… take a breath. You are in the right industry at the right time. Demand is not shrinking. It is growing. The only question is whether your business grows with it or misses the moment.
Gerritt: And missing this moment would be painful. Because someday people will look back and say this was the golden era of the trades. The moment contractors had more leverage than ever before.
Justin: And in Part 2, we’re going deeper into the challenges behind the boom. How interest rates shape homeowner decisions. How regulations and permitting delays create a bottleneck. How immigration and workforce policies affect labor supply. And how contractors can thrive through the friction.
Gerritt: Yeah, because every boom has rough edges. But winners navigate edges. They don’t run from them.
Justin: Exactly. Don’t go anywhere Part 2 is coming up next. Let’s break down how to turn this economic moment into long-term success for your business.

Justin: Welcome back, everyone. So if you caught Part 1, you already know we’re leaning toward the idea that the trades are not slowing down. But there are definitely challenges right now that make contractors nervous. And I get it. When interest rates shoot up and borrowing becomes painful, people start hesitating on big-ticket projects.
Gerritt: Absolutely. If you tell a homeowner their monthly mortgage payment jumped by seven hundred bucks just because of interest rate hikes, their kitchen remodel suddenly becomes less important than groceries. Fear kicks in. And fear always makes people hit pause.
Justin: But pause doesn’t mean stop. That is the key difference. A delay in projects isn’t the same thing as a disappearing market. It often means there’s a growing pile of deferred work waiting to explode later.
Gerritt: Right. Every homeowner who says “Let’s wait six months”… becomes six-months-from-now future business. And when they all unpause at once? The backlog becomes crazy.
Justin: Think about roofers. A homeowner might avoid replacing a roof because money is tight. But one bad storm? One insurance claim? The job becomes unavoidable. Plumbing is the same story. Electrical too. These aren’t optional luxuries. They’re necessary for safety and survival.
Gerritt: Even remodeling is shifting. People are choosing mid-tier upgrades instead of luxury tear-outs. They’re improving, not replacing. They still want their home to feel better. They just shop smarter. Contractors who adapt pricing and offer good-better-best options still win.
Justin: And then you have a bigger shift happening underneath all of this. Remote work changed America forever. People are moving. Cities are expanding outward. Rural areas are growing fast. Wherever people go, construction follows.
Gerritt: At the same time, natural disasters are growing in frequency. Storms, wildfires, floods… tragic events, yes, but they result in huge demand for restoration, roofing, remediation, and infrastructure rebuilding. And that work doesn’t care about recessions.
Justin: We also can’t ignore the climate and energy transition happening. Homes built in the 60s, 70s, 80s weren’t designed for modern energy efficiency. Contractors are getting slammed with demand for insulation upgrades, new HVAC systems, solar integration, smart electrical panels. That’s decades’ worth of work.
Gerritt: And here’s something that doesn’t get talked about enough: the U.S. population isn’t shrinking like some countries. More people means more buildings. More families. More repairs. More everything.
Justin: So the boom continues… but with friction. Let’s talk about the friction points, because ignoring those would be irresponsible.
One, high interest rates. They do slow borrowing temporarily.
Two, labor shortages. Huge delays and wage inflation.
Three, permitting and regulations. Every year adds more red tape.
Four, supply chain unpredictability still exists.
Five, aging contractors retiring without replacements.
Those are real hurdles.
Gerritt: Yup. And if you’ve ever been stuck waiting three months for a simple piece of electrical gear, you’ve lived that frustration. It makes scheduling a complete circus.
Justin: But here’s what separates thriving contractors from struggling ones. Thrivers plan for friction. They price correctly. They communicate clearly. They don’t apologize for charging what the job really costs today not what it cost five years ago.
Gerritt: Exactly. The contractors who keep underpricing because they’re afraid to scare off business? They’re going to feel like the recession is personal. Because they’ll struggle even in a booming market.
Justin: Let’s talk about money for a second. When homeowners see a quote, they think the contractor pockets the entire number. They don’t see liability insurance premiums doubling. They don’t see equipment financing costs. They don’t see overhead, gas, taxes, workers comp, materials. The contractor’s cut is a slice not the whole pie.
Gerritt: Yeah, the comment “I’ll buy the materials so you just charge labor,” might be the funniest misunderstanding in construction. Labor is the expensive part. Skilled tradespeople are scarce. That’s why labor is rising. The trades are finally worth what they’ve always been worth.
Justin: And rising wages for skilled workers is a sign of a boom not a recession.
Gerritt: Exactly. Contractors feel stressed because they’re slammed. Employees are tired because they’re busy. Customers are impatient because they’re waiting. All three things are signs of a boom cycle that hasn’t been modernized yet.
Justin: The industry has a growth headache. It doesn’t have a decline disease.
Gerritt: That needs to be another t-shirt.
Justin: I’ll get the merch team on a bulk order. But seriously what we’re experiencing right now is expansion that is messy. Huge demand with insufficient capacity.
Gerritt: And here’s something else the average person doesn’t understand. The U.S. government has already allocated billions to infrastructure projects. That money doesn’t disappear. It doesn’t evaporate. It might move slower than we would like. But eventually, it hits the field. And the field will need workers.
Justin: Yes. Tens of thousands of electricians, ironworkers, welders, heavy equipment operators. The kinds of careers that give people stability. The construction recession theory ignores the largest spending investments since World War II.
Gerritt: And let’s talk private sector. Major companies are building factories again. Manufacturing is shifting back to the U.S. For energy security. For technology production. For national strategy reasons. Those mega-projects are trade-heavy and multi-year.
Justin: So if you’re a contractor thinking, “Should I grow or shrink?” the smart answer is grow with discipline. Not reckless. Not chaotic. But grow into the opportunity.
Gerritt: Expand your team slowly and smartly. Add software and tech that saves time. Build partnerships with subcontractors. Focus on customer communication. Charge properly. And protect profit like your life depends on it.
Justin: Because your life and your future does depend on it. There is a once-in-a-generation wave happening. Contractors who paddle will ride it. Contractors who stand in place will get swallowed.
Gerritt: And think about the new generation coming in. Gen Z is actually showing more interest in trades than the generation before them. They want meaningful work. They want skills. They want opportunity. We have to lead them well because they are the cavalry arriving just in time.
Justin: And here’s a wild thought… if we didn’t have this boom? There would be no room for the next generation to enter. This surge in demand is creating careers for millions.
Gerritt: So now that we’ve talked about the financial and workforce side, let’s bring it home. The final question every contractor asks: “Am I personally in danger from this market?”
Justin: If you are organized? No. If you are modernizing? No. If you are focused on service and quality? No. If you are building a team and a brand? Absolutely not. The real danger is ignoring the moment.
Gerritt: Yes. Fear benefits no one. Action benefits everyone.
Justin: And in Part 3, we’re going to deliver the winning playbook. How to position yourself to grow no matter what politicians or economists say. How to market smart during uncertain times. How to thrive even when others hesitate. Because confidence built on strategy replaces panic built on headlines.
Gerritt: I’m excited for that one. Because that’s where the money is.
Justin: No matter what, construction doesn’t sleep. And if you’re awake with it, you win. Stick around Part 3 coming up next.

Justin: Alright, here we go the part contractors need most. Let’s talk about how to succeed in this economic moment. Because knowing we’re in a boom cycle is great. But knowing how to position your company to take full advantage of it? That’s where the game changes.
Gerritt: The number one move contractors need to make right now is shifting away from chaos management and into strategy management. The average contractor still wakes up every day reacting to whatever hits them the emergency call, the weather issue, the angry client, the material delay. When you run your business reacting to problems, you spend your whole life playing defense.
Justin: The smart companies in this boom are the ones who flip the script and go on offense. They plan their growth. They track their numbers. They improve customer experience. They invest in tools that make everything smoother. They protect their margins. They build a brand people trust.
Gerritt: Branding might be the single most undervalued asset in construction. If the market ever tightens even a little bit, the companies with the strongest brand win first. People choose the name they recognize. The truck they’ve seen. The company their neighbor mentioned. Trust moves ahead of price in tough moments.
Justin: Exactly. And right now, when everyone is busy, when everyone is booked, that’s the moment to stand out. Not because work is scarce but because when the market is crowded, visibility matters more. You want to be known before the customer ever needs you.
Gerritt: And for any contractor thinking branding is just a fancy logo… nope. Branding is reputation multiplied by consistency. It’s showing up the same way every customer interaction. Clean uniforms. Good communication. Respectful crews. Straight answers. When that becomes your identity, customers don’t get quotes they get you.
Justin: Let’s talk about financial discipline too. In a boom cycle, money comes fast. And if you’re not careful, it goes faster. I’ve seen contractors upgrade trucks, equipment, even buy new buildings too early. Growth requires investment, but dumb growth kills companies quicker than no growth.
Gerritt: Right. The big question isn’t “Can I afford this now?” It’s “Can I afford this if work slows down for three months?” Smart growth survives shifts. Reckless growth collapses as soon as the wind changes direction.
Justin: Another critical adjustment pricing. Contractors must stop apologizing for charging profitable prices. Costs are real. Insurance is rising. The cost of running a business is higher than ever. If you underbid out of fear, your company loses money even in a boom. And when the economy shifts a little? You collapse first.
Gerritt: I talk to contractors every week who say they’re busy but broke. That should never happen. Busy and broke means something is fundamentally wrong in pricing. And now is the chance to correct it while demand is high.
Justin: Let's add workforce strategy to the conversation. Because we talked about labor shortages in Part 2. Smart contractors treat hiring as marketing. They constantly sell their company as the best place to work. They don’t wait until they’re desperate. They build a reputation that attracts the next generation before the need hits.
Gerritt: And the best recruiting tool in construction is pride. When employees feel proud of who they work for, they bring their friends. They tell their network. Reputation fills seats faster than job ads.
Justin: Yes. Treating crews well is no longer optional. The companies paying respectfully, training people, and offering growth opportunity they will dominate. Everyone else will run out of help.
Gerritt: On top of that, tech adoption is absolutely essential. We are in a digital world now. Customers expect tracking. Crew leaders need real-time job details. Owners need data at their fingertips. If your business still runs on handwritten notes and guesswork, you won’t keep pace.
Justin: And here’s what tech does it takes all the work you’ve already earned and makes it more profitable. While everyone else wastes time, misses communication, and makes costly mistakes, your system keeps you smooth and fast. Smooth and fast is how you scale without chaos.
Gerritt: Let’s talk about emotional leadership. Because this transition is stressful. Contractors feel overwhelmed. They carry risk every day. And the pressure builds without relief. The best leaders are honest with themselves and their teams. They admit when they need help. They ask for input. They build a culture that owns teamwork instead of blaming each other.
Justin: When the business grows, stress can grow with it. But stress doesn’t have to run the show. Preparation reduces pressure. Systems reduce pressure. Trusting others reduces pressure. The toughest business owners are the ones willing to delegate.
Gerritt: If you want a business that works, you can’t be the one doing everything forever. Your job transitions from doing the work… to empowering the work.
Justin: Here’s something every contractor needs to remember. You didn’t take on this career to barely survive. You took it on to win. You took it on to build freedom. You took it on to build a better life for yourself and the people you care about. And the moment to secure that future is now.
Gerritt: A strong economy in construction doesn’t come often. Historically, it hits in waves. And we are sitting on top of a giant one. The time to paddle is not when the wave reaches the shore it’s when you feel that momentum lifting you.
Justin: So if you’re hearing this and thinking about whether you should grow… think bigger. Not reckless. Not blind. But bigger. Strengthen your website. Tighten your operations. Automate what slows you down. Build relationships with suppliers. Build relationships with subcontractors. Build relationships with customers.
Gerritt: Build everything. Except excuses.
Justin: That’s a shirt too.
Gerritt: We’re building a whole clothing line out of this episode.
Justin: But seriously, when people look back on this decade, they’re going to say this was the greatest era to build a contracting business in America. Those who took the chance will retire proud. Those who hesitated will regret the opportunity they let slip away.
Gerritt: You might be tired. You might be overwhelmed. But big wins require belief. Belief in the future. Belief in the trade. Belief in yourself.
Justin: Take advantage of the demand. And live in the confidence that you are in the most essential industry in this country. Because when every other industry struggles… construction builds the foundation for recovery.
Gerritt: One truth never changes. If construction stops, America stops. And that means the trades are the heartbeat of growth. Always have been. Always will be.
Justin: So to answer the question we started this whole episode with… we aren’t entering a construction recession. We are building through a construction boom. And the only contractors who will miss out are the ones too afraid to move forward.
Gerritt: Don’t freeze. Don’t shrink. Build.
Justin: That’s the message. Thank you all for listening to Hard Hat Chat. If this helped you think clearer about the future, share it with another contractor. We rise together. And this industry deserves strong leadership. So let’s lead.
Gerritt: Until next time keep swinging hammers, keep solving problems, and keep building the world we all rely on.
Justin: We’ll see you in the next episode.