At the recent 2025 ABA Annual Conference in Flagstaff, attendees were treated to Anirban Basu’s trademark blend of economics and entertainment. His keynote, Monetary Masala, was equal parts data-driven forecast and stand-up routine, complete with Denzel Washington movie references and side comments about Taylor Swift and Travis Kelce saving the American economy. I would have personally gone with Brad Pitt and F1.
Behind the humor, however, were some serious lessons for the building industry. Here are the key takeaways Arizona contractors should be paying attention to:
1. Inflation Isn’t Done With Us
Basu reminded us that while inflation has cooled from its 2022 highs, it still hovers well above the Fed’s 2% target. Interest rates remain stubbornly high, making financing more expensive for both homeowners and developers. For builders, this means:
- Clients are cautious: Projects may get postponed, not canceled.
- Margins are squeezed: Rising materials and labor costs don’t always match what bids can capture.
- Cash flow discipline matters: Competitive construction markets eventually push profits back toward zero, so staying lean and efficient is critical.
IT Perspective: Inflation impacts not just materials and labor, but also technology. Rising software subscription costs, cybersecurity insurance premiums, and licensing fees can quietly eat into margins. Builders who treat IT like a strategic asset rather than an overhead expense can unlock efficiencies:
- Automate workflows (estimating, billing, compliance reporting) to reduce manual labor.
- Use cloud-based financial dashboards to monitor cash flow in real time.
- Consolidate redundant tech subscriptions to cut costs.
2. Workforce is the True Equalizer
While wealth inequality in America has grown, Basu highlighted that the job market has been the great equalizer, especially for entry-level workers whose wages have risen the fastest. In construction, this connects directly to:
- Ongoing labor shortages, worsened by the departure of undocumented workers.
- Higher pay demands at nearly every skill level.
- The need to invest in training and retention to keep projects staffed.
IT Perspective: Technology can help contractors stretch workforce capacity. When labor is tight, the goal is to do more with the same headcount.
- Deploy mobile apps that keep field crews connected to the office without wasted trips.
- Use project collaboration tools (like Procore, Bluebeam, or Teams) to streamline communication.
- Invest in cybersecurity awareness training to protect your people from phishing attacks because one wrong click can cost exponentially more than a missed bid.
3. Arizona’s Construction Outlook is Stronger Than Most
Basu contrasted national softness with Arizona’s boom. Since 2020, Arizona has added nearly 50,000 construction jobs, with the Phoenix metro accounting for most of the growth. Why? Structural shifts:
- Semiconductor manufacturing (TSMC)
- Data centers
- Population migration into the Sunbelt
For contractors, this means backlogs are more stable in Arizona than in many other regions, even as the national housing market cools.
IT Perspective: Growth in semiconductors and data centers isn’t just about construction volume, it’s about technology expectations. These clients demand advanced IT security, compliance, and uptime guarantees. Contractors who modernize their own IT systems demonstrate credibility when competing for these projects.
Action Step: Audit your IT systems against the requirements of large-scale industrial projects. Can you handle secure file transfers, real-time project data, and compliance audits without hiccups? If not, upgrading your IT stack may be the difference between winning or losing bids.
4. Watch for Red Flags
Basu cautioned contractors about a few emerging risks:
- High office vacancies due to remote work (Phoenix at 22%).
- Rising consumer debt now that pandemic savings are gone.
- Material costs are still volatile, with tariffs adding extra strain.
- Public budgets tightening, as COVID-era federal aid runs out.
IT Perspective: Just as builders face these risks in their projects, IT faces parallel risks. Remote work expands the attack surface for cyber threats. Tariffs impact hardware imports. Tight budgets push companies to “make do” with outdated systems, creating vulnerabilities.
Action Step: Run a technology risk assessment. Identify outdated hardware, unsupported software, or weak remote access policies that could jeopardize profitability. Contractors already deal with enough uncertainty and your IT shouldn’t be one of them.
5. The “Taylor Swift Effect” (No, Really)
In classic Basu style, he noted that Beyoncé and Taylor Swift concerts have had measurable GDP impact. The point? Consumer spending is resilient, even when households are stretched. For construction leaders, it’s a reminder that confidence and culture drive markets as much as raw numbers.
IT Perspective: In the same way, employee and client confidence in your technology matters. When crews know their apps will load, files will sync, and systems won’t crash mid-project, morale rises. And when clients see you using modern, professional tools, their trust (and spend) increases.
Key Takeaways for Arizona Builders
- Stay focused on cash flow discipline as costs remain unpredictable.
- Invest in workforce solutions - today’s labor shortages aren’t cyclical, they’re structural.
- Leverage Arizona’s growth sectors (manufacturing, data centers, migration-driven housing).
- Keep an eye on policy and global trade shifts, which will ripple down to construction costs.
- Don’t neglect IT as a lever for efficiency, your systems can make the difference in how well you weather these challenges.
Anirban Basu left the Flagstaff crowd laughing but also thinking hard about the next 12–18 months. His parting message was clear: the national picture is mixed, but for Arizona builders, the opportunities remain strong if we manage costs, talent, and risk wisely.
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