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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 April Starts +14%, A Bit Better than Usual Seasonal Uptick

 
May 15th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

ConstructConnect announced today that April’s volume of construction starts, excluding residential activity, was $42.5 billion. The latest month-to-month change was +14.3%. Moving from March to April usually accounts for the biggest gain due to seasonality. The long-term average increase in starts between the third and fourth months of the year has been +12.0%.

2018-05-14-US-Nonresidential-Construction-Starts-April-2018

April of this year versus the same month of last year was -5.0%. April of this year versus the five-year average for April, from 2013 through 2017, however, was a much better +28.8%.

April 2018’s year-to-date performance was -15%. Still, that was an improvement over March’s first-reported pull-back of -22%. The year-to-date percentage changes early in 2018 are being held down by Q1 2017’s exceptional strength in starts. This effect will gradually dissipate.

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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An Eye-Popping 3.9% Unemployment Rate in April’s U.S. Jobs Report

 
May 4th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

April’s Employment Situation report from the Bureau of Labor Statistics (BLS) highlights a month-to-month increase in total U.S. jobs of +164,000. But that figure understates the employment improvement, since March’s level was revised upwards by +30,000.

U.S. April Jobs Report Graphic

Therefore, the accumulated gain in April was +194,000 jobs.

The average monthly increase in total U.S. employment through the first one-third of this year has been +200,000. In 2017, during the same January-to-April time frame, the average monthly climb was +117,000. The year-over-year increase in the monthly average is +13.0%.

The number that really pops out from the latest data release on the U.S. labor market, however, is the unemployment rate. Prior to April, it had been sitting at 4.1% for six months in a row.

In April, it finally dropped below 4.0% to stand at 3.9%. A 3.9% jobless figure is the lowest since December 2000, almost two decades ago.

Furthermore, there is another measure of the unemployment rate calculated by the BLS that is broader in scope and habitually higher. Its official title is U-6 and it includes individuals only marginally attached to the labor force, plus those who are engaged part-time but would prefer to be occupied full-time.

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11 Mid-April Economic Nuggets

 
April 16th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

Despite U.S. construction continuing to record a total activity level below potential, the sector should be receiving more bouquets for the bigger role it is playing in the economy overall.

11 Mid-April Economic Nuggets Graphic

Historical data from the Bureau of Labor Statistics (BLS) records that in the year 2000, the number of manufacturing jobs in America’s economy was 17.3 million. The same source records that the number of construction jobs at the turn of the century was 6.8 million.

In 2017 versus 2000, the number of manufacturing jobs in the U.S. was down by 28% to 12.4 million, while the number of construction jobs was ahead by 3%, to 7.0 million.

The clearest way to illustrate the rising importance of construction relative to manufacturing, at least from an employment standpoint, is to express their relationship in terms of a ratio. In 2000, there were four jobs in construction for every ten jobs in manufacturing. Now, there almost six on-site jobs for every ten production-line positions.

More dramatic still has been the shift in favor of construction work in Canada. In 2000, there were 2.2 million Canadian manufacturing jobs compared with 800,000 in construction. By 2017, manufacturing employment had retreated by -23%, to 1.7 million, while construction employment had surged by +75%, to 1.4 million.
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Ranking and Reviewing America’s Top Dozen Exporting States

 
April 3rd, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

This article provides a ranking of America’s Top Dozen States according to their goods export volumes in full year 2017.

Total U.S. goods exports last year amounted to almost one-and-a-half trillion dollars.

Ranking and Reviewing America’s Top Dozen Exporting States Graphic

The background foreign trade data comes from the Census Bureau’s web-based site entitled USA Trade Online. While it’s relatively easy to open a free account, if one is not familiar with ‘pivot tables’, there is a bit of a learning curve to access the statistics.

The type-of-product designations follow the definitions in the North American Industry Classification System (NAICS).

(1) Texas:

Texas, with export shipments of $264.1 billion and a 17.9% share of the nation’s total, was the leader among U.S. states for foreign sales in 2017. The NAICS category at the top of the Lone Star State’s exports list was ‘computer and electronic products’ ($47.0 billion), but close behind were ‘petroleum and coal products’ ($44.0 billion), ‘chemicals’ ($40.0 billion) and ‘oil and gas’ ($32.0). ‘Chemicals’ exports were dominated by synthetic rubber.

While Texas has a high level of computer-product exports, it would be more accurate to say that the State is especially strong in energy-product export sales. Energy products as a catch-all would combine refined petroleum (e.g., gasoline), chemicals, crude oil and natural gas for more than $100 billion.

In 2017, there were substantial increases in oil exports from Texas to China, Canada and South Korea. Other major customers for Texas crude last year were Mexico and Brazil.

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Spring 2018 Put-in-place Construction Forecasts for Canada

 
March 27th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

The historical records of Canada’s put-in-place capital spending numbers for residential, commercial, industrial, institutional and engineering construction are to be found in Statistics Canada’s on-line Cansim Tables 026-0013, 026-0016 and 029-0045.

Whereas construction ‘starts’ numbers are lump-sum figures entered at the time of groundbreaking, the ‘put-in-place’ data series are meant to mirror progress payments as projects proceed.

2018 03 26 Canada put in place construction forecasts Graphic

The history i n those previously mentioned Cansim Tables, however, currently stops at 2017. But there is another source for 2018 estimates – the non-residential Capital and Repair Expenditures (CARE) survey.

There’s a problem, though. The 2018 data from CARE is set out according to capital spending by industrial sectors. These is no re-arrangement of those amounts according to the five type-of-structure categories.

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3 Maps Showing Q4 2017 versus Q4 2016 Construction Employment Change in American States

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

Article source: ConstructConnect

This article features three maps showing relative rates of change in total number of construction jobs year over year for U.S. States. The not-seasonally-adjusted (NSA) background data on employment comes from the Bureau of Labor Statistics (BLS).

The year-over-year (y/y) percentage calculation for each state, which enables a ranking (within ranges) from fastest to slowest, is the three-month number-of-jobs average for Q4 2017 versus the three-month number-of-jobs average for Q4 2016.

The ‘legend’ sets out the ranges. The U.S. national average construction jobs growth was +3.5%.

In the maps, states where the y/y increase in on-site jobs from Q4 2016 to Q4 2017 exceeded +3.5% are colored green. There are four shades of green progressing from lightest (jobs growth of +3.6% to +5.0%) to darkest (+10.1% and higher.)

States where the y/y change in on-site construction jobs was +3.5% or less are indicated by blue shading. The two deepest shades of blue denote states where the y/y change was 0.0% or negative.

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ConstructConnect’s February 2018 Starts -8.4% Versus Prior Five-Year Average

 
March 19th, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

ConstructConnect announced today that February’s volume of construction starts, excluding residential activity, was $23.6 billion. The latest month-to-month change in the volume of starts, at -24.3%, was more than the usual mild drop from January to February due to seasonality.

2018-03-19-US-Nonresidential-Construction-Starts-February-2018

February of this year relative to February of last year was -35.5%. The level of starts in February 2017, however, was unusually high, $36.6 billion. Comparing February of this year with the average for February in the preceding five years (2013 to 2017), the change was -8.4%. February of this year versus the average for the four years 2013 to 2016 (i.e., omitting 2017) was +2.4%.

Year-to-date nonresidential starts in 2018 have been -26.4% versus January-February of 2017. The first-two-months of this year versus the comparable period in 2016 was a less severe slide of -3.2%.

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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‘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 January report was 60%; the latter’s share was 40%.

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., February 2018) is one month ahead of the reporting period for the investment series (i.e., January 2018.)

Over the past four months, jobs growth in construction has been surging. From November 2017 through January 2018, the month-to-month employment pickups were +42,000, +42,000 and +40,000 respectively. February’s result was a further quickening of the pace, +61,000. The combined four-month gain in construction hiring has been +185,000 jobs. The last time there was such a substantial four-month increase was from January to April 2006, +193,000. In 2006, though, there was a homebuilding boom, fueled by subprime mortgages, that turned into a bust.

Total construction employment is still half a million jobs below its prior peak in 2007, before the onset of the Great Recession. That gap will likely be eliminated quickly. According to the latest Employment Situation report from the Bureau of Labor Statistics (BLS), the U.S. construction sector is generating jobs at a year-over-year rate (+3.7%) that is more than twice as fast as for all workers in the economy (+1.6%). The unemployment rate in the sector in the latest February was 7.8%. Twelve months ago, it had been 8.8%. The jobless figure is traditionally worse in winter.

The Employment Situation report also includes jobs results for three other sectors with close ties to construction. Employment with ‘real estate’ offices in February was +1.7% year over year; with ‘building material and garden supply stores’, +3.9%; and with ‘architectural and engineering services’ firms, +3.3%. Since designers must provide assembly instructions before projects can proceed, their +3.3% staffing increase suggests ongoing healthy construction activity.
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3 Maps Showing 2017 versus 2016 Housing Starts in American States

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

The three maps in this infographic focus attention on the 2017-over-2016 percentage changes in homebuilding activity in America’s states. The Census Bureau does not publish home starts statistics at the state level, but it does compile and release residential permits numbers.

3 Maps Showing 2017 versus 2016 Housing Starts in American States Graphic

Therefore, the shadings in the maps are based on permits data (in units). The words ‘permits’ and ‘starts’ will be used interchangeably in the following commentary.

The total number of new home permits in the U.S. in 2017 was +6% compared with 2016. As the ‘legend-key’ sets out, individual states with percentage increases over +6% are shaded in green − for warmth.

As the shading moves from lighter green to darker green, the percentage increases move higher.

States shaded in blue − for chillier − had year-over-year increases that were +6% or less. The darkest shades of blue are reserved for states where there were significant 2017-over-2016 declines.

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Total U.S. Jobs +313,000 in February; Construction and Manufacturing Combine for +92,000

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

Article source: ConstructConnect

In February, the U.S. recorded its biggest month-to-month jump in total employment in more than a year-and-a-half, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS).

Total U.S. Jobs +313,000 in February; Construction and Manufacturing Combine for +92,000 Graphic

A monthly net increase in jobs of +170,000 is acceptable; +200,000 is good; +300,000 is outstanding. February’s number was +313,000. (The last time a better result was achieved occurred in July 2016, at +325,000 jobs.)

The average jobs increase in the first two months of this year has been +20% compared with the average for January-February of last year, +276,000 over +230,000.

Because more people returned to the labor force and the participation rate climbed from 62.7% to 63.0% between January and February, the unemployment rate stayed at 4.1%. The jobless rate has been 4.1% for the past five months in a row, dating back to October 2017.

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Construction Material Costs – Latest PPI, IPPI and RMPI Results, U.S. and Canada

 
March 2nd, 2018 by Alex Carrick, Chief Economist at ConstructConnect

Article source: ConstructConnect

When assessing building material cost changes, the primary source for the U.S. is the Producer Price Index (PPI) data series calculated by the Bureau of Labor Statistics (BLS). (The BLS is also responsible for the Consumer Price Index.)

2017-05-05-US-Canada-PPI-Graphic

For Canada, one turns to the Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) data series from Statistics Canada.

While the history of the latest PPI numbers (Table 1) extends to January 2018, the IPPI and RMPI figures (Table 2) are currently available only through December 2017.

The PPI results include specific findings for ‘final demand construction’ (i.e., overall construction) as well as private capital versus government investment, plus five specific type-of-structure sub-categories.

Read the rest of Construction Material Costs – Latest PPI, IPPI and RMPI Results, U.S. and Canada

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