The U.S. economy has made a sharp transition from slumping to pumping. Concrete producers, technology suppliers, equipment manufacturers and contractors are looking forward to another strong year. But inflation still looms for oil, construction materials and equipment. A fundamental shift in construction activity likely will occur this year, economists predict. With several interest rate hikes expected from the Federal Reserve throughout 2005, the super-heated housing market could ease into decline. But that is not likely to happen until late in the year, experts say. Interest rates for 30-year mortgages eventually will reach a 6.5% "tripping rate," according to Ed Sullivan, chief economist for the Portland Cement Association.
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