U.S. Economy Stumbling Blocks A year and a half into the coronavirus health crisis, the economies of the United States and Canada have been running into some stumbling blocks. In the United States, GDP growth in Q1 and Q2 of this year, at +6.3% and +6.5% respectively (quarter to quarter annualized), was looking pretty good, and not far out of line with the +7.0% forecast figure for the full year adopted by many analysts. But the third quarter has not been looking as sparky.

August’s Employment Situation report from the Bureau of Labor Statistics says that the total number of jobs in the U.S. economy rose by +235,000 in the latest month. A gain of nearly a quarter of a million jobs may sound like a lot, but in the grand scheme of things, it’s rather tame.

The latest (July 2021) U.S. put-in-place construction spending numbers from the Census Bureau are shown in Table 1 below.

Canada’s foreign trade picture brightened considerably in June. The nation’s merchandise trade balance recorded its biggest surplus since before the 2008-2009 recession. Furthermore, there have now been four surpluses in the past six months. During the decade prior to this year, Canada’s monthly goods trade balance spent a lot of time below the zero x-axis (Graph 1).  (‘Merchandise’ trade is a fancier way of saying ‘goods’ as opposed to ‘services’ trade.)

The headlines are no longer screaming about steeply climbing lumber prices. The ultra-sharp gains are over and a pullback phase has settled in.

The 14 graphs in this article set out how housing starts have been performing so far this year (i.e., through July) in the U.S. and Canada, nationally and by regions, states/provinces, and cities. There are also looks at the single-family home building market versus the multi-unit segment.  

Top of mind for economic analysts these days is the question of how rapidly prices (or costs, from a different perspective) are moving, and in what direction. The construction sector, mainly on the residential side, has been plagued much of this year by extraordinarily large climbs in prices for forestry products. July’s Producer Price Index (PPI) results from the Bureau of Labor Statistics (BLS) show an abatement in this problem. Softwood lumber’s July PPI was -29.0% month to month and -16.3% over the latest three months. Nevertheless, it was ahead by a mighty +45.0% year over year; but in May, it had been +154% y/y.

ConstructConnect announced today that July 2021's volume of construction starts, excluding residential work, was $37.6 billion (green shaded box, Table 8 below), a decrease of -3.1% vs June 2021's $38.8 billion (originally reported as $38.4 billion).

The accompanying table records the top 10 project starts in the U.S. for July 2021.

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