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Posts Tagged ‘Economy’

ConstructConnect’s Starts Continue Winning Trend in April

Monday, May 16th, 2016

Article source: ConstructConnect

ConstructConnect announced today that April’s level of U.S. construction starts, excluding residential work, was $30.1 billion, a further climb of +8.1% month to month on top of March’s leap of +14.0%. Since the usual or long-term average gains in March and April, due to seasonality, are +2.5% and +12.0%, the kick-off to 2016’s spring has been more than kind to the construction sector.

Comparing April of this year with what was an admittedly lackluster same fourth month of last year, the change was an outsized +30.7%. That’s approaching one-third higher. The level of year-to-date starts in 2016 has been +14.5% versus the January to April time frame of 2015.

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 March report was 60%; the latter’s was 40%.

Ten Mid-May Economic Nuggets

Friday, May 13th, 2016

Article source: ConstructConnect

The U.S. and Canadian economies appear to have entered a ‘blah’ stretch. In April, U.S. total employment rose by 160,000 jobs, a tepid figure compared with the previous two months (i.e., +208,000 in March and +233,000 in February). The unemployment rate, though, stayed the same as in March, at a tight 5.0%.

The latest U.S. initial jobless claims figure shot up to 294,000 for the week ending May 7. Only four weeks prior, it had been as low as 248,000. The most recent 294,000 number does extend the streak of beating 300,000 for more than a year. If that’s ever been done before, it was way back in the early 1970s. But 294,000 is now cutting it close. It doesn’t permit much wiggle room. The foreheads of some economists are beginning to show worry lines.

Canada’s jobs pool shrank by 3,000 in April, although again the unemployment rate stayed on a par with the month before, at 7.1%. Total employment in Canada is presently +0.8% year over year, which is less than half the U.S. rate of increase, +1.9%. Specifically for the construction sector, on-site employment in the U.S., at +4.1% year over year, is significantly outpacing Canada’s +1.4%.

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) Where are the jobs of the future? With an aging population, on account of the post-World War II baby boom generation moving half-way and further down the hall of life, providing expanded and personalized health care is becoming more critical. Consider the following percentage changes. While the year-over-year increase in total employment in the U.S. economy in April was +1.8%, the jobs climb at hospitals was +4.0%; at assisted living facilities for the elderly, +4.1%; and in home health care, +6.1%.


15 Eye-Catching Charts that Highlight Trends in Canada and U.S. Jobs (Part 3)

Friday, May 13th, 2016

Article source: ConstructConnect

In Part 3 of this Economy at a Glance, we’ll conclude our examination of how certain key sectors of the Canadian and U.S. economies are performing, as captured by the slopes of their jobs graphs.

As stated in Part 1, whether or not employment is on the upswing can give a pretty good indication of which way firms in a particular sector are leaning in terms of investment spending (which may be limited to machinery and equipment) or construction projects.

The underlying data for the U.S. and Canada comes from surveys of employers. A significant point of difference is that the U.S. numbers are seasonally adjusted, while for Canada, they are moving 12-month averages of not seasonally adjusted (NSA) figures, placed in the latest month.

Some of the charts in Parts 1 and 2 grabbed one by the neck-tie and demanded that attention be paid. In Part 3, while subdued by comparison, they still offer much that is informative.

Canada Elementary and Secondary Schools (Graph 11): Demographics as a driver of elementary and secondary school attendance, and by extension new construction, is currently quite positive. The number of children in the relevant age cohort from 4 to 17, after declining from 2000 to the present, is now set to begin increasing again in fairly dramatic fashion, out to at least the mid-2030s.

Canada Community Colleges (Graph 12): The ‘community college’ category includes Quebec’s C.E.G.E.P.s (Collèges d’enseignement general et professionnel). Employment in colleges in Canada has flattened since the mid-point of 2010. Due to the fact the age-specific demographic drivers for colleges are mostly the same as for universities, both will be covered in the next section.

Canada Universities (Graph 13): Take what was said for elementary and secondary schools and turn it upside down. The primary age-relevant cohort for college and university enrolments is 18 to 26. While the population count for that faction in society has risen steadily during the 16 years since the start of the new millennium to the present, a tumble will be occurring from this point in time moving forward until about the middle of the 2020s.

Employment in universities has been exhibiting a gentler upward slope in the latest two-and-a-half years. The best hope for this branch of academia may reside in older adults and retired seniors returning to classrooms for re-training, skills upgrades and the general thrill of the learning experience. The latter may lead to a second degree in a beloved subject that was put on the back burner during the raise-a-family and bring-home-the-bacon years.

Canada Hospitals (Graph 14): In the U.S., employment in hospitals has followed a bumpy pathway since the introduction of the Patient Protection and Affordable Care Act in 2010. Not so in Canada, which has a long history of universal health care.

As Graph 14 so ably illustrates, there’s been nary a setback in the upward progression of the jobs level at Canada’s hospitals over the past dozen or so years. Not even during the Great Recession.

And now the federal government is planning a big boost to spending on socially- and ecologically-conscious infrastructure projects over the next 10 years. Hospital boards will be rejoicing and hospital workers will see their ranks swell.

U.S. Temporary Help Services (Graph 15):  For three to four years following the 2008-2009 ‘Big Dip’ in the U.S. economy, the stirrings of employment re-birth were most apparent in the ‘temporary help services’ sub-sector jobs category. Graph 15 highlights how steeply inclined the curve was in 2010 through 2012.

The logic flows easily. Employers, shaken by the severity of the preceding precipitous plunge and worried that the recovery might not last, were quick to hire part-time workers to satisfy any increases in orders for goods or services that might come their way.

As the improving business conditions became more prolonged, this stop-gap measure ran its course and was replaced with hiring policies more favorable towards full-time positions.

Now, with the unemployment rate at only 5.0%, the need to make job offerings attractive (i.e., through benefits, pensions, etc.) has become essential.

Still, there are analysts who point to the apparent flattening, of late, in the ‘temporary help services’ curve as conveying a forewarning of harsher times pending, perhaps leading to the onset of a new recession.

The argument is as follows. Some employers are beginning to experience more challenging business conditions once again and their response has been to dismiss part-time staff. From an administrative standpoint, and perhaps even an emotional one, such a course of action is a lot easier than downsizing supposedly permanent workers.

The foregoing seems to be a lot of weight to attach to a relatively small correction in the graph.

But if one believes in being ever-vigilant, then it’s a theory worth tagging and remembering.

15 Eye-Catching Charts that Highlight Trends in Canada and U.S. Jobs (Part 1)

Wednesday, May 11th, 2016

Article source: CMDGroup

Note: The graphs (‘New Graphs’ and ‘Canada Graphs’ tabs in excel file) are integral to the article, but the text is actually standalone.

There’s a diversity of ways to assess the strength of an industry within the broader context of the overall economy. Stock market investors prefer to look at profit levels and price-earnings ratios. Financial institutions focus on debt and cash flow. Economists often choose jobs levels.

Whether or not employment is on the upswing can give a pretty good indication of which way firms in a particular sector are leaning in terms of investment spending or construction projects.

Previous Economy at a Glances have featured employment-level charts for key U.S. sub-sectors. Similar graphs have now been developed for Canada and they are featured in this EAAG.

The underlying data for the U.S. and Canada comes from surveys of employers. A significant point of difference, however, is that the U.S. numbers are seasonally adjusted. For Canada, they are moving 12-month averages of not seasonally adjusted (NSA) figures, placed in the latest month.

By No Means is it the Same Old World (Part 2)

Thursday, May 5th, 2016

Article source: CMDGroup

Part 1 of this Economy at a Glance introduced the topic of a dozen major ways in which the structure of society and the framework of the global economy are changing beyond what humankind has ever experienced before.

In Part 2, let’s dive right in with transition number (4), which will then lead organically into (5) and beyond.

(4) Rock star central bankers: Given that establishment politicians have been passing out of favor, maybe it’s just as well that central bank Chairmen and Governors have stepped into the spotlight.

Changes to taxation, spending and other fiscal tools to guide the economy have fallen out of favor and almost the whole responsibility for managing output, employment and other prosperity  indicators has fallen on each nation’s central bank.


By No Means is it the Same Old World (Part 1)

Wednesday, May 4th, 2016

Article source: CMDGroup

I’m writing this article on May 1, but it’s not an April Fools’ joke. Sure, there have been other times in world history, during war or plague, when turmoil has been so intense as to test, to the limits and beyond, the fortitude of mankind and womankind.

Still, I’m not sure humanity has ever before been on the cusp of so many changes that are already, or are on the verge of, shaking up the ways in which we live and interact with one another; and govern our economic and social affairs; and inspire dreams about really and truly astonishing futures.

The notion for writing this article first came to mind on account of six or so major trends that I’m always mulling over when I write about the economy and the construction sector. Upon deeper reflection, the number of discernible seismic shifts quickly expanded to a dozen.

There may well be more. Feel free to contact me if you believe I’ve failed to mention something equally or more important.

The following 12 sections have also been inspired by the question I’m always asking myself and which I know is of prime concern to you as well. What will be the implications for the construction sector?

A Great Canada Jobs Report for March but Head Scratchers Galore

Friday, April 8th, 2016

Article source: CMDGroup

There’s going to be a lot of cheering about Canada’s March labour market numbers as reported by Statistics Canada. The latest Labour Force Survey shows a month-to-month pick-up in total employment of 41,000 positions and a jobless rate that fell 0.2 percentage points to 7.1% from 7.3% in February.

Furthermore, most of the overall jobs increase (+35,000) occurred in the usually more stable and higher-paying, and thus better quality, full-time category of work as opposed to part-time (+6,000) activities.

Plus, all the boost to employment was provided by the private sector (+65,000), as the public sector downsized slightly (-2,000). Self-employment (-22,000) staged a significant retreat.

Still, there were some real oddities in the rest of the figures.

U.S. Corporate Profit Growth Stymied by Energy Sector Slide

Tuesday, April 5th, 2016

Article source: CMDGroup

North America’s major stock market indices have taken investors on a ‘theme park’ ride over the past 12 months − as can be seen from Graph 1. More often than not, it hasn’t been much fun.

There were substantial dips for all four indices – Dow Jones Industrials (DJI), the S&P 500, NASDAQ and the Toronto Stock Exchange (TSX) − in September of last year, followed by recovery for the U.S. series, and then another crater in the January-February period of this year.

Canada’s TSX stayed mainly down once it faltered in the fall of last year.

In the most recent month, however, there were notable improvements once again. At the close of trading in March 2016, the DJI, S&P 500 and NASDAQ were all within 1.0% of their levels achieved a year prior.

The TSX moved +4.9% during the month of March, but was still -9.4% year over year.

Worry has centered on the likely performance of corporate profits. It’s well known that in the energy sector, the low price of oil is taking a heavy toll on the revenues of exploration and extraction companies, as well as their service and material suppliers.


A Bit More Ammunition for a Fed Rate Hike from March’s U.S. Jobs Report

Friday, April 1st, 2016

Article source: CMDGroup

In March, the size of the U.S. labor force rose by nearly 400,000, as many working-age people who were previously on the sidelines jumped back into the job hunt.

As a consequence, the participation rate rose to 63.0%, a climb of 0.3 percentage points since the start of the year’s level of 62.7%.

Both developments are votes of confidence in possible employee prospects. They indicate more out-of-work individuals now feel they have a better shot at finding a welcoming face, corporate or otherwise, to pay them a living.

This notion received a boost from March’s month-to-month gain in the total number of non-farm jobs in the economy, +215,000, as reported by the Bureau of Labor Statistics (BLS).

Furthermore, the total employment increase was widely dispersed among industry categories, with payrolls in ‘education and health’ (+51,000) increasing the most; but with ‘retail trade’ (+48,000) and ‘leisure and hospitality’ (+40,000) not that far behind.


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

Monday, March 7th, 2016

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.)


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