Article source: ConstructConnect

According to ConstructConnect, U.S. nonresidential (NR) construction starts year to date in 2020 have been -26.9% compared with January-August of last year. Table 1 ranks the Top 20 states by their NR construction dollar volumes.

One feature that pops out is how dominant Texas is in the NR starts arena. The state’s dollar volume of starts has been cut in half (-51.1%) so far this year, but it still ranks number one overall. (Texas in full year 2019 was home to eight ‘mega’ projects starts with a combined value of $29 billion; 2020 has seen only project valued at more than $1 billion in the state.)

The dominance of Texas isn’t just because two of the other three large population states also recorded big NR starts declines. Florida was -38.3% and New York, -24.1%. Even if those two states had stayed flat, Texas would still be beating them.

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Article source: ConstructConnect

A relatively easy, but nonetheless effective, way to assess city labor markets is to rank them in two ways: (1) according to year-over-year jobs-count percentage changes, from biggest to smallest; and (2) by unemployment rates, from lowest to highest.

For (1), I’d normally say from fastest to slowest, but that doesn’t currently apply. Due to the pandemic, the y/y number-employed changes for all 51 of America’s biggest cities are negative. Therefore, the ordering of urban areas according to (1) goes from those with the mildest y/y ‘total jobs’ contractions (i.e., best) to those with the most severe (i.e., worst).

In Table 1, rankings (1) and (2) are shown side-by-side. Placing them next to each other facilitates a judgement as to which cities are doing best with respect to their labor markets.

The six cities with green shadings in Table 1 are among the Top 10 for both smallest job losses and tightest unemployment rates. The half dozen labor market winners are Oklahoma City, Indianapolis, Salt Lake City, Austin, Dallas-Ft Worth and Kansas City.

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Article source: ConstructConnect

From an overview perspective, the Census Bureau’s put-in-place (PIP) capital spending statistics are providing a misleading picture of what is happening in the construction marketplace. They are too buoyant.

In July, total PIP spending, seasonally adjusted and annualized (in ‘current’, not inflation-adjusted dollars) was +0.1% month over month, with residential at +2.1% and nonresidential, -1.2%.

The month-to-month ‘total’ for June was -0.5% and for May, -1.3%. The worst m/m percentage change for ‘total’ this year occurred in April, at -3.4%, but that was hardly alarming relative to what’s been seen in many other sectors (e.g., ‘retail’, ‘accommodation’ and ‘food services’).

April was also the low m/m point for total’s two sub-sectors, residential at -4.4% and nonresidential at -2.7%.

From Table 1, year-to-date PIP spending is +4.2%, comprised of residential at +6.5% and nonresidential, +2.6%.

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Article source: ConstructConnect

Disappointing M/M Employment Results

According to August’s Employment Situation report from the Bureau of Labor Statistics, the total number of jobs in the U.S. economy in the latest month rose by +1.4 million and the seasonally adjusted (SA) unemployment rate decreased to 8.4% from 10.2% in July.

The not seasonally adjusted (NSA) unemployment rate in August was 8.5%, down from 10.5% the month before. The total number of unemployment individuals in America is now 13.6 million. In August of last year, the figure was 6.0 million.

The increase of +1.4 million jobs was a slowing from +1.7 million in July and +4.8 million in June.

The headline numbers on jobs gain and jobless rate are probably going to be greeted with enthusiasm. It’s somewhat disappointing, though, that the percentage increases in jobs month to month for most industrial sectors aren’t more upbeat. Base or ‘denominator’ levels for the calculation are quite low

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Article source: ConstructConnect

High Tech Stocks Ride to the Rescue

Table 1 below shows several of the key metrics for four major U.S. and Canadian stock market indices. In August, two of the four indices managed to soar to new all-time highs, the S&P 500 and NASDAQ. Furthermore, they reached those summits during trading on the final day of the month, indicating that further upward movement might be expected in early September at least.

As of closing on August 31, the DJI was -3.9% compared with its all-time peak, which isn’t much of a gap. The Toronto stock exchange was a little further behind relative to its record high achieved on February 20, 2020, -8.1%.

The most astonishing number in Table 1 is NASDAQ’s climb of nearly +50% compared with August 30th of a year ago. Second best for year-over-year increase was the S&P 500, at a jump of about one-fifth (+19.6%). But a one-fifth gain, while impressive on its own, falls considerably short of a one-half gain. NASDAQ has truly been a phenomenon.

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