Construction Economic News

U.S. real, i.e., inflation-adjusted, gross domestic product contracted by -0.9% in the second quarter of this year, on the heels of a -1.6% slide in the first quarter. (By way of contrast, Q4 2021 pulled ahead by +6.9%).

Yesterday’s 2nd Quarter 2022 advanced gross domestic product headline reading of a 0.9% contraction was not anticipated by all; however, this may have been in part due to the uneven performance of the economy by sector.

ConstructConnect’s Expansion Index, a monthly measure of the dollar value of construction projects in planning compared to the same month one year ago, registered 14% overall expansion in Canada and over 10% for the United States for the month of June 2022.

You’ll often hear that the residential real estate market will be the first among all players in the economy to signal a cyclical change—e.g., from recession to recovery or vice versa—brought on by central bank interest rate action.

There’s no getting away from it, the opening sentence of a story on present economic circumstances has to feature inflation. So that’s where we’ll begin our Nuggets report this month, with the first point below laying out the broad strokes. Then we’ll delve deeper into today’s pricing and costing structures, and what additional knock-on implications are being revealed by other recent public and private sector data releases.

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

June Tried, but Didn’t Match May for Megas ConstructConnect announced today that June 2022's volume of construction starts, excluding residential work, was $47.5 billion (green shaded box, bottom of page 11), a decrease of -24.3% versus May’s figure of $62.7 billion (previously reported as $63.4 billion). The sizable drop was to be expected, given that May had such an exceptional array of mega-sized project groundbreakings.

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

According to CME Group, an American global markets company and exchange operator, and The Wall Street Journal, CME Group will be introducing a new futures contract using ticker “LBR” starting as early as August 2022. This could be a significant benefit to smaller sawmills along with general and trades contractors involved in housing construction. Among the primary reasons are:

In the United States in June, according to the latest Employment Situation report from the Bureau of Labor Statistics, jobs creation maintained a strong pace, +372,000, although it didn’t quite keep up with the average through the first five months of this year, +474,000.