Construction Economic News

Clichés are often true and it is the case that a picture can be worth a thousand words.

The accompanying table records the top 10 project starts in the United States for November 2022.

Megaprojects are 2022’s Story of the Year ConstructConnect announced today that December 2022’s volume of construction starts, excluding residential work, was $50.1 billion, an increase of +58.1% compared with November’s figure of $31.7 billion (originally reported as $31.1 billion). After a relatively quiet month for megaproject starts (i.e., those of a billion dollars or more each) in November, they came roaring back in the latest month.

On January 12, 2023, the Bureau of Labor Statistics released its Consumer Price Index results for December, measuring the change in prices of goods and services. To Wall Street’s relief, the numbers pointed to a notable decline in the inflation rate compared to a month ago.

The collective revenues of the 14 largest U.S. publicly-traded firms in the nonresidential construction industry grew at a historic pace during the seven-quarter period between the end of 2020 and the third quarter of 2022, the latest quarter for which actual results are available. Total revenues during the period increased by nearly 50%, with the fastest growth occurring during the second half of 2022 as demand for construction surged.

ConstructConnect’s Expansion Index is a monthly measure of the dollar value of planned or contemplated construction projects compared to the same month one year ago. The Index geographically covers Canada, the United States, and their respective states and metropolitan statistical areas.

Fighting through the headwinds of more restrictive interest rates, the U.S. economy managed another good month of jobs creation in December, +223,000, according to the Bureau of Labor Statistics. It should be noted, however, that the month-to-month increase in nationwide employment has been gradually diminishing over the past six months.

In July 2022, the economics team at ConstructConnect reported that the CME Group, the holding company to the Chicago Mercantile Exchange, Chicago Board of Trade, and New York Mercantile Exchange, was soon to bring a new lumber contract product to market. This new product would enable the trading of lumber options in truckload, rather than railcar, quantities.

Given the increases in mortgage rates that have transpired, significant slides in homebuilding activity are being taken for granted in the United States and Canada. Based on the latest housing starts statistics, this is already underway and clearly apparent in the former more than in the latter. See Graph 8 below, where Canadian housing starts have been moving mostly sideways throughout this year, while U.S. starts have been exhibiting significant declines month to month.

Canada has become much more than a natural resource-based economy.