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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 »

U.S. Housing Starts Forecasts and Long-term Graphs

 
March 24th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

CMD’s latest U.S. housing starts forecasts appear in Table 1 of this Economy at a Glance and the patterns for ‘total’, ‘single-family’ and ‘multi-family’ are readily apparent from the three accompanying graphs.

Charts showing the long-term regional results for Northeast, Midwest, South and West can be found in the web version of this story (please provide link). All the graphs include a dotted trend line as provided by Excel.

Huge pent-up demand for U.S. new housing construction has been accumulating since 2007.

That’s ten years, or a decade, with residential groundbreakings in a crater that descended as steep as only about half a million units in 2009. (They pinnacled at 2.1 million in 2006.)

Read the rest of U.S. Housing Starts Forecasts and Long-term Graphs

U.S. Economy Adds Nearly One-quarter of a Million Jobs in February

 
March 7th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

A significant milestone has just been reached in the U.S. labor market. For the latest week ending February 27th, America’s initial jobless claims figure was less than 300,000 for the 52nd week in a row.

That’s a whole year of strong success in keeping the number of people newly unemployed quite low. (In the Great Recession of 2008-2009, the number topped off at 670,000.)

Falling below their 300,000 benchmark level, rosy initial jobless claims automatically imply encouraging news from the Employment Situation Report published by the Bureau of Labor Statistics (BLS).

The BLS has just reported that in February, the total number of jobs in the U.S. rose by 242,000, where a gain of 200,000 or more is considered bullish.

The national unemployment rate stayed below 5.0% at 4.9%, the same as in January. A year ago, it had been 5.5%.

In another positive sign, the proportion of working-age people who actively sought employment in February moved a little higher, to 62.9%. This measure is called the ‘participation rate’ and it usually picks up when job prospects are good.

(On the flip side, when job prospects are abysmal, people stop looking for work and the result is a ‘discouraged worker’ effect.)

Read the rest of U.S. Economy Adds Nearly One-quarter of a Million Jobs in February

That’s Not How Things are Usually Done

 
March 3rd, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

Okay, I admit it, I’m flummoxed.

I’m supposed to be writing about the economy, but how can I stay focused in the midst of a U.S. presidential election campaign.

Voting day may still be eight months away, in November, but there are distractions galore in the surround-sound coverage of the primaries and caucuses.

The economy has become a side-show event compared with what is going on in the electoral center ring.

Over the past decade-plus, the differences between the Democrats and Republicans have become deeper and more firmly entrenched.

Positions on the left and right have turned inflexible. Celebrity commentators in the media have played roles in marshalling legions of strident supporters.

Policy stances have proven intractable, yielding gridlock in Washington.

The crop that’s now being harvested is a disdain for politics as normally practiced.

Among Democrats, Hillary Clinton has been hard pressed to establish a lead over her rival, Bernie Sanders, a man who doesn’t hesitate to label himself a socialist.

On the Republican side, the candidacy of Donald Trump was supposed to peter out by last September, according to almost all the pundits.

Read the rest of That’s Not How Things are Usually Done

Latest Annual U.S. and Canadian City Housing Starts (Parts 3)

 
February 27th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

The multi-family market is where the excitement is to be found in the U.S. and Canadian city housing starts markets.

Table 6 shows some strikingly large percentage gains in multi-family starts from 2014 to 2015, with New York (+109.6%) – already busting at the seams with high-rise towers – more than doubling its annual volume of groundbreakings.

Miami (+60.4%) and Dallas-Fort Worth (+54.4%) recorded year-over-year multi-unit starts increases that were ahead by more than half. While Miami has staged a nice recovery (to 16,000 units in 2015) in multi-unit starts since its disastrous level (only 1,600 units) in the Great Recession year of 2009, it still remains considerably below its 15-year previous best figure of 23,300 units in 2005.

Dallas, on the other hand, in 2015 (28,000 multi-family units) shot well past its prior most stellar year (18,400 units in 2008).

Boston (+42.5%), Los Angeles (+34.2%) and San Francisco (+30.5%), in 2015, had multi-family starts levels that were close to or better than one-third higher than in 2014.
Read the rest of Latest Annual U.S. and Canadian City Housing Starts (Parts 3)

Latest Annual U.S. and Canadian City Housing Starts (Parts 2)

 
February 26th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

In the previous Economy at a Glance, there was an examination of ‘total’ housing starts in the largest urban centers in the U.S. and Canada.

2015 ‘actuals’ and year-over-year percent changes were laid out in two tables for 12 cities south of the border and six on the northern side.

The figures are being called ‘starts’, although for the U.S. centers they are actually derived from residential building permits.

The city definitions are based on broad boundaries that include downtown cores and nearby suburbs with close commuting ties.

In this current EAAG, the focus will be narrowed to the single-family market.

Nation-wide in the U.S., single-family starts are now accounting for about two-thirds of total starts, with multiples making up the other 33%. (In Canada last year, the proportions were the reverse, 35% for singles and 65% for multiples.)

The share in the U.S. taken by ‘singles’ has dropped dramatically over the past several years. A decade ago, it wasn’t uncommon for singles to be as much as 80% of total starts.

Read the rest of Latest Annual U.S. and Canadian City Housing Starts (Parts 2)

Canadian Put-in-place Construction Forecasts: Spring 2016 Edition (Part 1)

 
February 25th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

Based on the latest ‘actuals’ from Statistics Canada, the spring 2016 forecasts, out to 2019, of construction capital spending − also known as put-in-place investment – have just been calculated by CanaData.

Versus the fall of 2015, the year-over-year projections have mostly been scaled back.

Grand total constant dollar (i.e., adjusted for inflation) construction will decline a further 3.1% in 2016 after a drop of 3.4% in 2015. 2017 will see a slight improvement of +1.0%, followed by +3.5% in 2018 and +4.3% in 2019.

In the fall of last year, the comparable percentage changes were: 2015, -2.2%; 2016, +0.5%; 2017, +2.7%; and 2018, +4.1%. There was no 2019 forecast at that time.

In current dollars, 2015’s grand total was $285 billion, or -2.4% compared with $292 billion in 2014.

After a further 1.8% decline in this current year, 2016 will chalk up a volume of slightly less than $280 billion.

Current dollar gains of 2.9% and 5.6% in 2017 and 2018 respectively will finally lift the total dollar value of all Canadian put-in-place construction activity above $300 billion two years from now.

Read the rest of Canadian Put-in-place Construction Forecasts: Spring 2016 Edition (Part 1)

Latest Annual U.S. and Canadian City Housing Starts (Parts 1)

 
February 24th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

This Economy at a Glance (EAAG) will look at home starts in major U.S. and Canadian cities, according to ‘totals’ (Part 1), plus single-family (Part 2) and multi-family (Part 3) markets.

The accompanying tables rank the dozen American and half-dozen Canadian cities by actual start levels in 2015 and year-over-year percent changes.

For both the U.S. and Canada, the cities are the broad designations (MSAs and CMAs) which include downtown cores plus all suburbs with close live-work commuting ties.

The website versions of these three articles include a wealth of graphs, since it is often true that a picture is worth a thousand words.

Nevertheless, here’s commentary on total new home groundbreakings in the 18 major cities.

In the U.S., the monster-sized market for total housing starts in 2015, at 86,400 units, was New York.

Two cities in Texas, Houston (56,900) and Dallas-Fort Worth (56,400), were in second and third places respectively, but way back.

Los Angeles (33,700) and Atlanta (30,000) placed fourth and fifth.
Read the rest of Latest Annual U.S. and Canadian City Housing Starts (Parts 1)

Defying Usual Seasonal Decline, CMD’s January Starts Rose 9.8%

 
February 17th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

CMD announced today that January’s level of U.S. construction starts, excluding residential work, was $24.7 billion, an increase of 9.8% versus December. The nearly double-digit percentage increase was noteworthy since there is usually (i.e., average over 10-years-plus) a December-to-January decline, due to seasonality, of 8.5%.

Compared with January of 2015, the latest month’s starts level was +12.9%. Relative to average non-residential starts in January over the preceding five years, 2011 to 2015, the gain was +18.6%.

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.

‘Non-residential building’ plus ‘engineering/civil’ work accounts for a considerably larger share of total construction than residential activity. The former’s combined proportion of total put-in-place construction in the Census Bureau’s December report was 63%; the latter’s was 37%.
Read the rest of Defying Usual Seasonal Decline, CMD’s January Starts Rose 9.8%

Canada’s Currency Drop Encourages Cocooning

 
February 16th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

My favorite meal when traveling on business or pleasure used to be breakfast in the hotel where I was staying. In the ‘old days’, a morning repast was almost invariably cheap, plentiful and delicious.

Last summer, I took my family to Chicago for some wonderful sightseeing. We live in Toronto. (Our oldest child has moved out of the house and he and his girlfriend undertake their own travel adventures.)

The price of the breakfast buffet where we were registered downtown was $32.50 USD. For the four of us, that would have come to $130.00 USD.

Such a charge would have been steep enough on its own. Factor in the value of the Canadian dollar at the time, and the price was going to be $160.00 CAD.

Consider the further devaluation in the loonie since then, and the pain rises to $185.00 CAD.

That’s serious coinage. It’s nearly enough to rent a tuxedo, which I’ve always considered to be an excursion into luxury land.
Read the rest of Canada’s Currency Drop Encourages Cocooning

The Greenback and Yuan are Ships Passing in the Night

 
February 15th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

The steep descent in the global price of oil began in early July 2014. It was rapidly accompanied by moderate to severe pullbacks in the posted charges for many other commodities.

Not by coincidence, late-summer 2014 was also the moment that launched many radical readjustments in currency values around the world.

Resource-supplying nations, suffering damage to their foreign trade balances, have been experiencing the most severe exchange rate declines ever since. Russia, Brazil, Australia and Canada are the prime examples.

The United States, viewed by international currency traders as a safe haven amidst all the turmoil, has seen its dollar move from strength to strength.

Nor has it hurt that as possibly the world’s most open economy, the U.S. marketplace has adjusted and recovered better than any other nation’s since the Great Recession. Indeed, U.S. employment and output have improved to such an extent that the Federal Reserve has moved out front among central banks in adopting a hawkish position on interest rates.
Read the rest of The Greenback and Yuan are Ships Passing in the Night

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