Article source: ConstructConnect

October Starts Moved Sideways

ConstructConnect announced today that the latest month’s volume of construction starts, excluding residential work, was $25.9 billion, nearly a match (-0.4%) for prior-month September’s $26.0 billion (originally reported as $24.3 billion). October’s year-to-date figure, however, remained down significantly compared with the first ten months of last year, -27.8%.

Given that October starts usually feature a mild seasonal decline, due to the arrival of cooler weather, it’s good news that the latest month stayed almost level (-0.4%) with September. But it’s important to record that October 2020 was way down compared with October 2019, -41.5%.

Often, in 2020, the individual monthly figures when compared with the same month of 2019 have fallen short with respect to mega proj- ects of a billion dollars of more each. 2019 was an exceptional year for ultra-large project initiations. (There were 35 of them, adding to $79 billion and 15% of total nonresidential starts.) May and August 2019 were the peak months for ‘megas’.
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Article source: ConstructConnect

• Inflation Down for the Count?
• Some of the Buffers Against Inflation are Weakening or Disappearing

Inflation Down for the Count?

The year-over-year change in consumer prices in the U.S. in October was +1.2%, according to the Bureau of Labor Statistics (BLS). In Canada, the latest month’s price climb was only +0.7% y/y, as calculated by Statistics Canada.

October’s y/y ‘core’ rates of inflation, which leave out volatile energy and food components, were +1.6% and +0.8% south and north of the border respectively.

The current rates of inflation in both countries are tepid and no cause for alarm. In fact, it’s been many years since inflation has been the terrifying prospect it once was.

A little inflation, of say around +2.0% y/y, is a good thing. It greases the wheels of economic activity, making loans easier to pay down for both business and individual borrowers. Current price hikes aren’t rising to even +2.0% y/y.

There have been background factors working to suppress inflation, however, and some of those buffers are weakening or disappearing. The next section will elaborate on some of those changes. (more…)