It may just be the calm before another storm, but the economic news seems to have quietened down quite a bit over the last little while. As for the political news, as both the Democrats and Republicans race towards their leadership conventions in a few months, that’s another story.
The pain in the oil sector on account of the deeply depressed price of crude is finally leading to some self-correcting courses of action. In the U.S. and Canada, capital spending plans have been slashed and production levels in the fracking sector significantly reduced. Internationally, Iran isn’t expected to ramp up export sales as quickly as once thought. And other OPEC members, including Saudi Arabia, appear intent on re-imposing a degree of control over their output levels.
The global price of oil may have found a floor near $40 USD per barrel. That’s a lot better than when it was nosediving towards $20. Furthermore, it will still provide car drivers, when they fill up, with gasoline charges that are pleasing bargains. Freeing up money so that it can be spent in other areas will prove especially important as the summer vacation season quickly arrives.
Against this backdrop, there are the following additional ‘nuggets’ to be gleaned from the latest government agency and private sector data releases. The ‘soil’ is rich and the ‘crop’ abundant.
(1) Let’s begin with CMD’s own construction starts statistics. Perhaps the most informative way to look at the numbers is to compare the year so far (i.e., through the first quarter, 2016) with the same time frame in 2015. On such a basis, grand total starts, in ‘current’ (i.e., not adjusted for inflation) dollars, were +7.4%, with major type-of-structure sub-categories performing as follows: residential, +3.7%; non-residential building, +11.8%; and heavy engineering, +5.8%. (more…)
While practicing the ‘art’ of economics, sometimes the statistics just fall into your lap.
For example, heading into 2016, it was the consensus opinion among analysts that Ontario and British Columbia would have the best upcoming growth performances among Canada’s ten provinces.
Consequently, there were grins from ear to ear among my fraternity when March’s Labour Force Survey from Statistics Canada showed Ontario with the largest year-over-year increase in jobs at +86,000, with British Columbia not far behind, at +72,000.
No other province was even close. In fact, the sum of Ontario and B.C., at +152,000, was greater than for the country as a whole, +130,000.
The material in this current Economy at a Glance continues in a similar vein. I’ve graphed the relatively long-term history of housing starts, from 1980 to the present, for the major cities in the U.S. and Canada and allowed Microsoft’s Excel to add a trend line.
Yes, I’m an economist first, but in my secondary role as ‘tech whiz’ – my wife and kids would guffaw at that assertion – I’ve come across an exciting feature of standard Excel spreadsheets that I feel must be shared with you.
Of course, there’s always the danger that I’ve finally clued in to something everybody else has known about for years. However, I’ve asked around and it seems most people aren’t yet aware of a tool called ‘Sparklines’ that is highly worthwhile.
And neat and cool and easy to use.
Let’s suppose you have a ‘wall’ of data, such as appears in Table 1 that accompanies this Economy at a Glance. I’ve included the row numbers and column letters for ease of explanation.
The statistics in cells ‘C2’ diagonally to ‘O22’ are percent changes of U.S. put-in-place construction investment, latest 12-month averages versus previous 12-month averages. (more…)
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.
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%. (more…)
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. (more…)
At the end of 2010, the unemployment rate in the United States was 9.3%.
Five years later, as of December 2015, the national jobless figure has been cut nearly in half, to stand at 5.0%.
There’s a common lament being heard that the tightening in U.S. labor markets has been overstated because a large bloc of potential workers has given up hunting for a job.
Furthermore, so the argument goes, whatever employment improvement has happened isn’t yet leading to better wages and salaries and the economy won’t really build up a head of steam until workers are being paid more, so they can spend more.
This Economy at a Glance will look at the percentage changes of year-over-year average hourly earnings for both production and supervisory workers in the private sector as a whole, and for major industrial sectors. Historical data can be readily downloaded from the web site of the Bureau of Labor Statistics (BLS).
In the hopes of finding trend lines, the analysis in this EAAG will be limited to the past five years.