Construction Economic News
Stay up to date on the latest construction economic news and get in-depth analysis and insights from Chief Economist Alex Carrick and Senior Economist Michael Guckes.
ConstructConnect’s Expansion Index is a monthly measure of the nominal dollar value of planned construction projects compared to the same month one year ago. The Index geographically covers the United States, Canada, and their respective states and metropolitan statistical areas. November’s release, which reports on data collected in the prior month, extended several of the industry trends that ConstructConnect has previously identified.
After a string of months with barely positive or backtracking employment change, Canada struck it rich in October, +108,000 jobs. The biggest portion of the +108,000 gain was provided by services jobs, +63,000 according to Statistics Canada, but manufacturing and construction also had good hiring months, +24,000 and +25,000 jobs, respectively.
ConstructConnect’s annual construction starts statistics for bricks and mortar retail sites are set out in Graph 1. The history goes back to 2005, and the forecast portion of the chart extends to 2026.
A month ago, the Employment Situation report from the Bureau of Labor Statistics reported a U.S. total jobs-count increase during September of +263,000. Now, for the month of October, a nearly identical change in total employment has been estimated by the BLS, +261,000 jobs. (By the way, September’s figure has just been revised to +315,000.)
After a gloomy patch in late summer and early fall, dominated by discussion of inflation and recession, the economic and construction news is beginning to lighten a bit. The first ray of sunshine has come in the 2022 third quarter advance estimate GDP report. Rather than retreating or standing still, Q3 real gross domestic product advanced by +2.6% seasonally adjusted and annualized, improving nicely on the -0.6% and -1.6% performances of Q2 and Q1, respectively.
Megaprojects Reignited Starts in September ConstructConnect announced today that September 2022’s volume of construction starts, excluding residential work, was $51.1 billion, an increase of +26.0 compared with August’s figure of $40.6 billion (originally reported as $40.0 billion).
The accompanying table records the top 10 project starts in the United States for August 2022.
Clichés are often true and it is the case that a picture can be worth a thousand words.
In mid-2022, overall inflation by some measures was approaching 9%, a 40-year high following more than a decade of historically low inflation rates. However, for manufacturers, distributors, and others purchasing raw materials, 9% annual inflation pales in comparison to the kinds of price swings these firms experienced for their raw materials beginning in mid-2020. For construction firms and product manufacturers, the last two years have been spent trying to raise output prices fast enough and high enough to cover rapidly increasing input costs.
The relationship between manufacturers, wholesalers, and end customers has been well documented over the last many decades. To speed the delivery of products to end users, wholesalers preemptively store finished products for quick sale. At the same time, wholesalers can decide whether or not to order replacement inventory from manufacturers which results in further orders to their suppliers. This movement of orders and materials takes time which can be a risk for both manufacturers and wholesalers when economic market conditions rapidly change.