Economists Warn of Elevated Recession Risk and Rising Material Costs at FGIA Summer Summit

GlassBase

Jul 16, 2026 4 - 6 min. read

Photo by Jakob Braun on Unsplash

The Fenestration and Glazing Industry Alliance (FGIA) brought together economists from the United States and Canada during its Summer Summit to outline the economic pressures facing the residential construction and window and door industry. The forecasts covered recession risk, consumer debt, lumber tariffs and Canadian infrastructure spending, all factors that directly affect fenestration manufacturers, dealers and installers on both sides of the border.

Robert Dietz, PhD, chief economist at the National Association of Home Builders (NAHB), presented on the state of the U.S. residential market during a session titled "Beyond the Headlines: Inflation, Interest Rates, Housing Supply in a Shifting Economy." Louis-Philippe Champagne of the Canadian Construction Association followed with a companion session on Canadian trade and political conditions, "Uncertainty and Opportunities: Navigating Change in Canadian Politics and Trade Relations."

Dietz told attendees that U.S. economic growth has slowed and pegged the probability of a recession over the next three quarters at 40%, well above what he called a normal baseline of 20%. He pointed to rising energy prices as a driver of consumer inflation and said tariff uncertainty late last year contributed to a slow start for the economy in 2025.

Consumer debt is compounding the slowdown, according to Dietz. He noted that a growing share of car owners now owe more on their auto loans than their vehicles are worth, a condition known as being underwater, and said many consumers have turned to credit cards to cover routine expenses. Both trends, he said, are weighing on household spending power.

Not all indicators are negative. Dietz said data center construction has surged since 2022, coinciding with the public release of ChatGPT, though that growth moderated in 2025. Data centers now represent a meaningful share of non-residential construction activity, he said, while demand for traditional single-family homebuilding remains intact. The housing supply deficit is narrowing, Dietz added, though affordability remains a persistent obstacle for buyers.

Construction costs are also climbing, driven in part by higher diesel and gasoline prices, Dietz said. Lumber prices have held roughly steady since 2023, but he warned of upward pressure later this year because roughly a quarter of U.S. lumber supply comes from Canada. He said the current tariff rate on Canadian lumber is double what it was at the start of the second Trump administration, a shift that could push framing and construction costs higher for builders and, by extension, window and door suppliers tied to new construction.

On a brighter note, Dietz pointed to remodeling activity as a growing share of residential construction spending. He said the aging U.S. population should support solid housing demand through the second half of the decade, benefiting replacement and remodeling segments of the window and door market alongside new construction.

Champagne opened his session by confirming that Canada is technically in a recession, though he characterized the downturn as expected. He identified four challenges facing the Canadian construction sector: infrastructure investment, workforce shortages, outdated procurement practices and supply chain disruptions.

On infrastructure, Champagne said the Government of Canada has committed $115 billion in spending over the next five years, including $51 billion earmarked for local infrastructure such as housing and transportation. He said that spending will require fenestration products, representing a potential opportunity for window and door manufacturers serving the Canadian market.

Workforce shortages remain a concern, Champagne said, with job vacancy rates holding above pre-pandemic averages even as Canada's overall labor force shrinks due to population decline. He said labor demand in construction has grown faster than in other sectors, intensifying competition for skilled workers.

Champagne also flagged a procurement trend he called concerning: public agencies awarding progressive, collaborative contracts but evaluating them using traditional bid criteria. He recommended that project value assessments account for long-term operations and maintenance costs rather than upfront price alone.

Supply chain disruptions round out the list of challenges, according to Champagne. Higher oil prices are raising diesel costs for on-site operations and the cost of petroleum-based building materials, including piping, roofing membranes, insulation and adhesives. He said Canada does not manufacture many of these products domestically, singling out wide-flange beam steel, a structural steel shape used in building framing, and float glass, the flat glass process used in most architectural glazing, as areas of particular concern.

Champagne closed by noting that Canada faces a 25% tariff on architectural steel imported from the United States and China. Because Canada does not produce architectural steel domestically, he said, the tariff creates a direct cost problem for builders. He added that trade decisions made in the United States will continue to shape how the two countries' construction industries work together going forward.