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Posts Tagged ‘Alex Carrick’

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

Monday, March 19th, 2018

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.


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.

View this information as an infographic

‘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.

3 Maps Showing 2017 versus 2016 Housing Starts in American States

Tuesday, March 13th, 2018

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.


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

Friday, March 2nd, 2018

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.)


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.


Ten Mid-February Economic Nuggets – With a Focus on Inflation Fears

Thursday, March 1st, 2018

Article source: ConstructConnect

At the beginning of February, there was a great deal of volatility in the U.S. major stock market indices. They fell into ‘correction’ territory, which in ‘market-talk’ means they dropped by 10% from their peaks, before steadying and heading cautiously upwards again.

Ten Mid-February Economic Nuggets Graphic

Some of the initial downward movement was due to profit-taking, on the heels of years of exceptional equity price gains. As the retreat grew more severe, however, it became harder to explain, especially since the recently passed tax cuts will provide an extra boost to corporate bottom lines.

A consensus explanation gradually emerged and it goes as follows. Yes, the economy is growing rapidly and job creation is outstanding. But maybe output growth and labor market conditions are too good. The level of unemployment has dropped near a historical low. Can wage restraint hold? Furthermore, there is a synchronous world expansion underway and commodities demand is heating up. Prices for key raw materials are climbing once again.

All these developments have the potential to light a fire under inflation. And if inflation is on the rise, the Federal Reserve may feel the need to initiate ‘cooling’ interest rate hikes faster than earlier anticipated. Some economic forecasting firms are already projecting there will be four, not three, interest rate increases this year.

Therefore, perhaps the hottest topic for discussion throughout 2018 will be how inflation is performing. Specifically, is the ‘Consumer Price Index for All Urban Consumers (CPI-U)’ busting free from its +2.0% (year over year) bondage and raising more havoc?


New Industry Snapshot dated February 2018 and based on January starts stats

Thursday, February 15th, 2018

Article source: ConstructConnect

ConstructConnect announced today that January’s volume of construction starts, excluding residential activity, was $29.3 billion. The fact that some of the monthly starts numbers can display wild swings is confirmed by the following. January 2018’s volume of starts relative to December 2017’s level was +35.8%; but January 2018 compared with January 2017 was -22.6%.


The outsized percentage changes resulted from December 2017 being abnormally low ($21.6 billion) and January 2017 being inordinately high ($37.9 billion). Usually, it’s the presence or absence of a mega project or two that causes the monthly number to display extreme volatility.

Comparing January of this year with the annual average for January from the preceding five years, 2013 to 2017, − i.e., employing a ‘smoothing’ technique, − yields an increase of +9.7%.

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.

View this information as an infographic.


Rankings of U.S. State Construction Employment Statistics

Monday, January 8th, 2018

Article source: ConstructConnect

The tables accompanying this article highlight some of the key statistics on construction employment in 48 U.S. States. The source material from the Bureau of Labor Statistics (BLS) omits Delaware, the District of Columbia (D.C.) and Hawaii. The most recent data is for November 2017 and is not seasonally adjusted (NSA).


Table 1 ranks states by number of construction workers; Table 2 ranks states by year-over-year change in number of construction workers; and Table 3 ranks states by year-over-year percentage change in number of construction workers.

It’s not surprising that the large-population-states also account for the highest numbers of construction workers. The ranking positions 1 through 7 in Table 1 − i.e., California followed by Texas, Florida, N.Y., Pennsylvania, Illinois and Ohio − exactly correspond with the latest (for July 1, 2017) state population rankings.

Further down the listing, however, there are some significant variances. For example, Georgia is 8th for population, but 11th for construction employment; Michigan is 10th for population, but 13th for construction employment; New Jersey is 11th for population, but 15th for construction employment; Washington is 13th for population, but 9th for construction employment; Maryland is 19th for population, but 12th for construction employment; Colorado is 21st for population, but 14th for construction employment; and Louisiana is 25th for population, but 17th for construction employment.


U.S. December Jobs Creation ‘Weakish’, but Construction Compensation Bullish

Friday, January 5th, 2018

Article source: ConstructConnect

U.S. net total jobs creation in the final month of last year was a tepid +148,000, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). The ‘weakish’ December result caused the monthly average throughout all 2017 to pull back slightly to +171,000

Just the same, +171,000 as a monthly average in 2017 signifies a more than satisfactory performance, although it was down from 2016’s comparable figure of +187,000.

The U.S. unemployment rate in December remained the same as in November, at an exceptionally tight 4.1%.

The seasonally adjusted (SA) number of U.S. construction jobs recorded a nice gain in December of +30,000. Such a substantial increase in employment for on-site workers was the biggest leap since February 2017’s +54,000.

Construction’s Interaction With High-Tech is Much More Than the Obvious

Tuesday, December 19th, 2017

Article source: ConstructConnect

Construction’s interaction with high-tech is much more than the obvious.


Yes, there are the products (e.g., smart phones) and the processes (e.g., BIM) that factor in, but there is also a wide range of economic issues to consider as well.

U.S. Put-in-Place Construction Spending Forecasts – Heading Into Winter 2017

Wednesday, December 13th, 2017

Article source: ConstructConnect

ConstructConnect is known for its ‘starts’ statistics and forecasts. Twice per year, however, − in early summer and late fall − ConstructConnect also calculates and publishes ‘put-in-place’ construction spending projections.


It helps that the ‘starts’ numbers are leading indicators for the PIP figures.

The history of PIP capital spending is compiled and published by the Census Bureau. A thorough explanation of the differences between ‘starts’ and ‘put-in-place’ is provided at the end of this article.

ConstructConnect is now estimating that ‘grand total’ U.S. put-in-place construction spending in 2017, expressed in ‘current’-dollar terms (i.e., not adjusted for inflation), will be $1.233 trillion.

Stock Market Prices Playing Sidekick Role in a ‘Buddy Movie’

Monday, November 13th, 2017

Article source: ConstructConnect

As shown in Graphs 1, 2 and 3, the most widely known and discussed U.S. stock market indices – Dow Jones Industrial (DJI), S&P 500 and NASDAQ – all set new record highs in July.

On a year-over-year basis, the DJI at the close of last month was +18.8%; the S&P 500 was +13.6%; and NASDAQ especially stood out with a gain of +23.0%.

Just as remarkable have been the improvements in those three indices relative to their prior peaks.

Since its previous summit in October 2007 (13,930), the DJI is +57.2%.

Since October 2007 (1,549), the S&P 500 is +59.5%.

Also since October 2007 (2,859), when it managed a mini-peak, NASDAQ is presently +122.0%. NASDAQ is even up substantially (+35.2%) relative to its ‘Mt. Everest’ of peaks in February 2000 (4,696), when the ‘ boom’ was in full swing.


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