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Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More »

ConstructConnect’s August Nonresidential Starts -19% M/M, But Only -2% YTD

 
September 13th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

ConstructConnect announced today that August’s volume of construction starts, excluding residential activity, was $33.1 billion − a month-to-month change of -18.9%. The long-term history of the starts data records a ‘normal’ change of -3.5% from July to August, due to seasonality. (Starts are traditionally strongest in Spring and early Summer.)

2018-09-12-US-Nonresidential-Construction-Starts-August-2018

Compared with August of last year, this year’s latest-month nonresidential starts volume was -9.5%.  Relative to the nonresidential five-year average for August, from 2013 through 2017, this year’s latest-month starts volume was +2.7%. Year-to-date nonresidential starts in 2018 compared with the same January-August time frame of 2017 have been -1.9%.

The starts figures throughout this report are not seasonally adjusted (NSA). Nor are they altered for inflation. They are expressed in what are termed ‘current’ as opposed to ‘constant’ dollars.

‘Nonresidential building’ plus ‘engineering/civil’ work accounts for a larger share of total construction than residential activity. The former’s combined proportion of total put-in-place construction in the Census Bureau’s July report was 55%; the latter’s share was 45%.


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ConstructConnect’s construction starts are leading indicators for the Census Bureau’s capital investment or put-in-place series. Also, the reporting period for starts (i.e., August 2018) is one month ahead of the reporting period for the investment series (i.e., July 2018.)

The all-jobs increase for the U.S. economy in August was +1.6% year over year, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). Hiring by the construction sector has been more robust, +4.3% year over year. The month-to-month nominal jobs increase in construction in August was +23,000, the same as the average monthly gain since the beginning of this year. Construction hiring on average for January-August 2018 is up by one-third versus 2017’s +18,000 monthly average for the first two-thirds of 2017. Construction’s current unemployment rate is 3.4%, the same as in July, but down from 4.7% in August 2017. Construction’s jobless rate is lower than the ‘headline’ figure for the whole economy, 3.9%.
Read the rest of ConstructConnect’s August Nonresidential Starts -19% M/M, But Only -2% YTD

Equity Price Patterns of 39 Companies with Ties to Construction

 
August 21st, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

There’s nothing complicated about today’s article. It simply examines, with the aid of the accompanying table, the latest 12-month performances of the share prices of nearly 40 well-known companies.

2018-08-21-Equity-Price-Graphic

The 39 firms have been arranged alphabetically according to their primary industrial activity. Not all sectors are represented. One obvious omission is ‘health care’. CVS and Walgreens-Boots under ‘General Retail’ will have to serve as proxies.

But there has been an attempt to capture companies with direct or indirect (i.e., through capital spending on manufacturing facilities, retail space, etc.) ties to construction.

For each company, the two right-hand, percentage-change columns compare the current share price with: (1) the latest 12-month low; and (2) the latest 12-month high.

With respect to 12-month lows, percentage changes that are 50.0% or more have been shaded lightly in gray.

With respect to 12-month highs, percentage changes that are -20.0% or more steeply negative have been shaded in red.

Read the rest of Equity Price Patterns of 39 Companies with Ties to Construction

12 Mid-August Economic Nuggets

 
August 20th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

The U.S. quarter-to-quarter annualized advance in gross domestic product (GDP) in the second quarter of this year was an outsized +4.1%. It was the fastest leap forward since 2014’s third quarter jump of +4.9%. Some of the strength has been attributed to exports that were shipped early to beat target dates for the imposition of tariffs.

12 Mid-August Economic Nuggets Graphic

Nevertheless, it’s fair to say that America’s economy is presently firing smoother on more cylinders than it has in a long time. And even when problems do crop up, such as a potential Turkish currency crisis, they are – to all outward appearances − being dealt with and hustled aside quickly.

The foregoing is not to imply that there are no nagging points of concern. After all, inflation is shaking off its long slumber and preparing to possibly initiate trouble. The all-items Consumer Price Index (CPI) in July was +2.9% year over year. Even the ‘core’ rate (+2.4%), which omits volatile food and energy components, exceeded the +2.0% level favored by the Federal Reserve.

Read the rest of 12 Mid-August Economic Nuggets

July the Year’s Best Month To-date for Employment Gain in Canada

 
August 13th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

Total employment in Canada recorded the best month-to-month increase so far this year in July, +54,000 jobs, according to the latest Labour Force Survey results published by Statistics Canada.

Prior to July, the best month-to-month improvements in 2018 had occurred in March and June, tied at +32,000 jobs.

The pick-up in hiring in July was entirely in part-time work (+82,000 jobs), as the number of positions classified as full-time suffered a setback (-28,000).

Read the rest of July the Year’s Best Month To-date for Employment Gain in Canada

Manufacturing and Construction Both Winners in U.S. July Jobs Report

 
August 3rd, 2018 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect

The lead paragraph of the Bureau of Labor Statistics (BLS)’s July Employment Situation  report highlights that total nonfarm payroll employment in the U.S. rose by 157,000 jobs during the latest month.

U.S. July Jobs Report Graphic

And that the unemployment rate declined again to 3.9% from 4.0% in June. The lowest the unemployment rate has reached in this cycle was 3.8% two months ago, in May.

Historically, the U.S. unemployment rate never falls much lower. The last time it was 3.8% was in April of 2000. Eighteen years have passed since then.

The seasonally adjusted (SA) unemployment rate through the first seven months of this year has averaged 4.0%. During the same time frame of last year, it was 4.5%.
Read the rest of Manufacturing and Construction Both Winners in U.S. July Jobs Report

Disconnect Between High-tech’s Influence and the High-tech Sector’s Jobs Creation

 
August 1st, 2018 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect

Computers, the Internet and other high-tech advances have profoundly affected the workaday lives of every one of us.

Many of the thought-leaders who have sparked the innovation waves have become celebrities beyond the confines of the business sector. And their companies have been richly rewarded through enormous increases in the value of their shares on the major stock markets.

Never mind that Netflix and Facebook have recently had some setbacks, the FAANG companies (Facebook, Apple, Amazon, Netflix and Google), along with many others (Twitter, Uber), have soared in value over the past decade-plus.

We’ve been living through a new industrial revolution. But there has long been one quibble raised by economists and others about these transformative times.

Historically, the birth of the auto industry, with its accompanying need for assembly plants, steel mills and gasoline stations, generated millions of new jobs.
Read the rest of Disconnect Between High-tech’s Influence and the High-tech Sector’s Jobs Creation

July 2018 issue based on June starts statistics. 1st half 2018 results.

 
July 13th, 2018 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect

ConstructConnect announced today that June’s volume of construction starts, excluding residential activity, was $39.8 billion – a month-to-month change of -24.7%. The one-quarter drop was not due to market conditions. Rather, the comparison of June versus May suffered from the latter including Foxconn Technology’s $10 billion industrial plant in Wisconsin. June relative to May exclusive of that single mega project was still down, but by only -7.2%. The historical May-to-June change, aided by favorable ‘seasonality’, has been +4.5%.

2018-07-11-US-Nonresidential-Construction-Starts-June-2018

June 2018 versus the same month of last year was -6.3%. June 2018 versus the five-year average for June, from 2013 through 2017, was +3.2%.

Year-to-date starts in 2018, compared with first half (H1) 2017 starts, have been -5.5%.

The starts figures throughout this report are not seasonally adjusted (NSA). Nor are they altered for inflation. They are expressed in what are termed ‘current’ as opposed to ‘constant’ dollars.


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Read the rest of July 2018 issue based on June starts statistics. 1st half 2018 results.

U.S. June Total Jobs Higher by One-quarter Million Versus Previously Reported May

 
July 6th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

June’s Employment Situation report from the Bureau of Labor Statistics (BLS) records a pickup in total jobs of +213,000 in the latest month.

U.S. June Jobs Report Graphic

But that +213,000 compares June’s level of total jobs with a revised figure for May. May’s figure is now being estimated higher by +37,000 vis à vis what was reported for May a month ago.

Therefore, June’s level of total U.S. jobs is now +250,000 (i.e., the sum of 213,000 and 37,000) versus what was reported by the BLS a month ago. That’s an increase in total employment of a quarter of a million jobs.

The gain in U.S. total employment through the first half of this year has been 1.3 million jobs. In H1 of last year, the increase was 1.1 million.

The monthly average climb so far in 2018 has been +215,000. Through the first six months of 2017, the monthly average increment was also good, but it was a somewhat lower +184,000.

Expressed another way, the monthly average jobs jump in first-half of 2018 has been +17% compared with the first-half of 2017.

The unemployment rate in June fell back slightly to 4.0% from 3.8% in May. The retreat was because the continuation of strong employment prospects has caused a month-to-month uptick in the participation rate, to 62.9% from 62.7%.

Among industrial sub-sectors, the three standouts for jobs improvement in June were: ‘education and health services’, +54,000; ‘professional and business services’, +50,000; and in a long-time-coming and pleasantly-welcome development, ‘manufacturing’, +36,000.

The leap in manufacturing employment was almost all within the durable goods realm, +32,000.

And within durable goods, hiring was most intense in ‘motor vehicles and parts’, +12,000; ‘fabricated metal products’, +7,000; and ‘computer and electronic products’, +5,000.

The +54,000 jog upwards in ‘educational and health services’ employment was comprised of ‘educational services’, +19,000; ‘health care’, +25,000; and ‘social assistance’, +10,000.

Staffing in ‘professional and business services’ (+50,000) received boosts from ‘temporary help services’, +9,000; ‘architectural and engineering services’, +7,000; and ‘computer systems design and related design’, +6,000.

Read the rest of U.S. June Total Jobs Higher by One-quarter Million Versus Previously Reported May

Infographic: Notable U.S. and Canada Construction Project Starts

 
June 7th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

Due to its complexity, much of the subject matter concerning the economy requires detailed editorial commentary, often supported by relevant tables and graphs. This infographic looks at notable U.S. and Canada construction project starts.

Infographic: Notable U.S. and Canada construction project starts

At the same time, though, there are many topics (e.g., relating to demographics, housing starts, etc.) that cry out for compelling ‘short-hand’ visualizations.

Whichever path is followed, the point of the journey, almost always, is to reach a bottom line or two.

To provide additional value at its corporate blog site, ConstructConnect is now pleased to offer an ongoing series of Infographics.

These will help readers sort out the ‘big picture’ more clearly.

to view the latest infographic  Click Here

Monitoring the Cost of 3 of Life’s Essentials: Gasoline, Rent and Coffee

 
May 29th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

Aficionados of horror movies know there are certain things – e.g., the proximity of Frankenstein’s monster – that will cause ‘the villagers’ to pick up their pitchforks and charge into the woods for a confrontation. It’s widely understood that the ‘villagers’ are you and me.

Such works may be escapist fiction, but while basic safety and security will always be a primary concern in real life, there are other terrors in non-fiction that are equally likely to incite our concern and ire and they’re mainly economic – e.g., a scarcity of jobs or sky-high prices.

With respect to inflation and rapidly increasing price levels, this article looks at three products that for many people are essentials – rent, gasoline and coffee.

Charts 1 through 6 show the year-over-year percentage changes of the rent, gasoline and coffee sub-indices within the broader Consumer Price Index (CPI) data produced by the U.S. Bureau of Labor Statistics (BLS) and Statistics Canada.

In the U.S., media headlines immediately prior to Memorial Day Weekend carried the message that travelers taking to the roads were about to discover that a fill-up at the gas pump would cost them nearly one-third more than a year ago.

The stronger U.S. economy has been contributing to more demand for gasoline. According to the website, www.gasbuddy.com/charts, the average price of gasoline in America is now $3.00 USD per gallon. Last year at the same time, it was $2.40. The increase has been +25%.

Rent Prices USA
Read the rest of Monitoring the Cost of 3 of Life’s Essentials: Gasoline, Rent and Coffee

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