In today's business environment, high interest rates are not always the prime culprit of suppressed construction activity, as surprisingly few projects, even in vulnerable markets such as office and retail, are completely dissolving due to rate increases, says Ken Simonson, chief economist at the Associated General Contractors of America. Homebuilding has fallen off, but Simonson says that's more directly tied to expensive construction and mortgage interest costs than federal interest-rate hikes.