At +311,000, the U.S. number on net jobs creation in February, as calculated by the Bureau of Labor Statistics, was okay. It was neither truly exciting nor in any way disturbing. It was down from the +504,000 performance in January, but it wasn’t the kind of figure that would signal a recession has arrived on everyone’s doorstep. And that’s what we’re all watching for, indications of slowdown in the economy that might take it into negative real (i.e., inflation-adjusted) GDP change territory. That’s not what was delivered in February’s jobs report.

Since the spring of last year, monthly total U.S. housing starts (annualized) have been on a downward trajectory. The weakness in housing starts is one of the chief arguments for speculation that a recession is just around the corner.

The accompanying table records the top 10 project starts in the United States for January 2023.

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

Implications of Megaproject Proliferation ConstructConnect announced today that January 2023’s volume of construction starts, excluding residential work, was $57.0 billion, an increase of +13.9% compared with December’s figure of $50.0 billion (originally reported as $50.1 billion). January was another month with an extraordinary wealth of mega-sized project initiations (i.e., projects carrying estimated values of a billion dollars or more each.) More on this in a moment.

U.S. import prices increased by 0.8% year-on-year for the period ending January 31, 2023. The latest reading is the lowest since 2020, when import prices temporarily contracted due to legislation that shut down the economy, causing a short-lived decline in demand. It marks a near plateau in import prices which, as recently as March 2022, were rising in excess of 13% on an annual basis.

Broad measures of the economy through mid-February continue to signal that consumer and business conditions overall are doing better than were expected just months ago when many were questioning just what kind of recession to expect in 2023. However, broad measures of economic performance can easily hide the strength or weakness of specific industries, including construction.

The dreaded and ballyhooed recession remains at bay for the moment. In fact, much of the recent news concerning the economy has been great. GDP growth at the end of last year was remarkably strong. Jobs creation is still supercharged. Unemployment rates are holding fast at minimal levels. Retail sales have been booming. ConstructConnect’s own construction starts statistics, supported by megaprojects, began 2023 with a bang. And inflation is continuing to abate.

During the decade between the Great Recession and the coronavirus pandemic (2010 – 2020), the U.S. economy added an average of 180,000 workers monthly. Had this trend not been interrupted by COVID-19, the United States would theoretically have added nearly 6.5 million new workers during the three-year period ending January 2023, cumulating in a total employed persons count of just over 165 million.

Inventory-to-sales levels can be helpful indicators of where the balance between supply and demand stands for various categories of products. If and when wholesaler and manufacturer inventory levels become bloated, it can lead to lower prices downstream for end-users, including trades and general contractors, as upstream suppliers reduce prices to protect their market share from competitors.