CHICAGO—US construction spending in 2016 has continued to set records, reaching $317 billion in the third quarter, a 1% increase year-over-year, according to a new report on the non-residential construction industry from JLL. Still, in the recent past, third quarter growth usually averaged between 7% and 10%, and company officials believe the small increase could indicate an impending slowdown.

Several factors seem to be at work. Developers already have a robust construction pipeline, for example, and face rising costs and a shrinking labor pool. Materials costs have reached a 2.2% growth rate year-over-year, a five-year high, largely due to a high demand for lumber. Building costs as a whole have increased in the third quarter, seeing a slow but steady rate of 2.6% growth year-over-year.

“The construction industry is cyclical and a national slowdown is to be expected,” says Todd Burns, president, project and development services. “In 2017, industry players will be closely monitoring real estate decisions, per project staffing and tech and hardware innovations to get the most bang for their buck.”