Construction Economic News

In January, the United States recorded a big employment increase, +517,000 jobs. In the same month, and with a considerably smaller population base, Canada followed suit, +150,000 jobs.

With trillions of dollars on the line and reputations at stake, banks have a strong incentive to accurately gauge the future of the economy. If the economy appears as though it is about to falter, banks have several ways to protect themselves from losing money or even risking their solvency. In short, banks can increase, or tighten, their loan standards, granting loans only to entities that they perceive as being the safest risks and hence more likely to pay back their loans.

U.S. lawmakers are preparing to impose a 200% tariff on Russian aluminum, according to a recent report from Bloomberg News. This tariff would effectively triple the price paid by U.S. importers of Russian aluminum and articles thereof, effectively pricing Russian aluminum out of the U.S. market.

As a follow-up to an article on U.S. construction material costs, the table and charts in this piece look at what has been happening in Canada. Generally speaking, the story in both countries is the same. While some inputs into construction are continuing to show price increases that are way up year over year, there are also instances of big declines. Furthermore, the trend over the latest three months decidedly features price retreats rather than advances.

A swell of fiscal results from publicly traded firms at the end of 2022 is just now being released to Wall Street and the public. In the coming weeks, these data will be used to update the future estimates of both revenues and earnings for the rest of 2023 and at least a portion of 2024.

The U.S. total number of jobs count rose by more than half a million in January, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). The climb in employment of +517,000 positions was double the increase in the preceding month of December.

Graph 1 below shows the moderation in construction material costs that has been taking place. There’s about a 50-50 split between items with year-over-year price increases versus those with y/y declines.

The National Association of Realtors January data release, covering activity for December 2022, pointed to a 10th consecutive month of quickly declining U.S. existing home sales. December’s reading of 4.02 million units was hardly different from the 4.01 million units reading, recorded soon after federally mandated lockdowns forced many title and realty offices to cease normal operations. To find an equivalent period, one must return to the worst depths of the Great Recession in mid-2010 to find a period when existing home sales activity was below the latest recorded level.

TD Economics, a division of Toronto Dominion Bank Group, released its latest Canadian Economic Outlook report on January 10, 2023. In it, the bank forecast an 11.7% decline in home prices and an 11% decline in housing starts during 2023. TD’s glum housing outlook is comparable to that of Canadian financial services cooperative Desjardins.

Hourly construction wage data recorded a 5.8% annual gain in December 2022, according to the Bureau of Labor Statistics. Compared to just one month ago, hourly wages rose by 0.42%. In dollar-per-hour terms. These increases represent annual and monthly per-hour gains of $1.80, and $0.15, respectively. These latest readings once again put wage inflation ahead of materials inflation which fell year-on-year to a recent low of 3.3% after increasing briefly by more than 30% YoY in 2021. The history of annualized wage and material cost increases over the years has seen both components successfully contend for the title of leading construction cost driver.