Article source: ConstructConnect+

I don’t know why this hasn’t received more attention and I’m finding it a little hard to believe, given that there are still pockets of the economy that have not fully reopened, but according to the Census Bureau, sales by food services and drinking places (i.e., bars and restaurants) have climbed to a level slightly above where they were prior to the pandemic.

This is a remarkable achievement. Graph 1 shows the disastrous decline in the activity level of this sector in the Spring of 2020 when the arrival of the coronavirus confined gourmands and watering hole patrons to their homes.

The toll on the employment of young adults was especially severe. Now, finally, their prospects are looking brighter again. But now, also, the debate over whether they are paid enough heats up.

Resistance to raising minimum wages will be butting heads with an unprecedented new problem, a difficulty in finding enough willing workers to fill open positions in the hospitality (and many other) sectors.

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Article source: ConstructConnect

Coming out of the pandemic, the U.S. economy is primed to ‘roar’, with GDP growth expected to be near +7% year over year in 2021, although moderating afterwards. Consumers have confidence and cash, having padded their wallets and purses after experiencing reduced outlets for spending during the several waves of lockdowns over the past year plus.

Interest rates will be stepping up a little faster than the Federal Reserve first intended. How quickly will be dependent on the performance of inflation. World trade will soon be accelerating, and a new round of commodity price increases appears imminent. Oil is back above $70 USD per barrel.

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Article source: ConstructConnect

ConstructConnect’s Expansion Index ties to the inventory of all the projects the company has in its data base that are in the planning stage, ahead of ‘starts’ or when ground is broken.

The index, which can also be referred to as a ratio, fluctuates around the number 1.0. For any geographic designation (national, state, province or city), the index value is the dollar volume of planned projects in any given month compared with and divided by the dollar volume of planned projects for the same month of the year previously.

By the way, ConstructConnect also calculates Expansion Index numbers for various types of structure, but that’s a story for another day.

Below are five graphs showing the histories of the Expansion Index, back to January 2020, for ‘total U.S.’ and the nation’s four most populous states – California Texas, New York and Florida.

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Article source: ConstructConnect

The most accessible single-source resource on construction material price movements is the Producer Price Index (PPI) data set from the Bureau of Labor Statistics (BLS). The PPI series monitors prices charged by producers as they exit through factory gates.

One drawback of a government statistical series, however, is that it will inevitably lag what is occurring in the real world, due to a time delay in collecting and tabulating results. For example, the latest PPI figures are for May. Therefore, they don’t factor in some of the decreases in final demand (e.g., some possible moderation in housing start activity) and increases in supply (e.g., more sawmill production of lumber) that may, according to ‘word of mouth’, be taking place.

Nevertheless, the PPI numbers are the best that’s available and the remainder of this article showcases them in tables and charts.

For 15 of the most important building materials or construction-related inputs, Table 1 highlights year-over-year and latest-three-months price changes.

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Article source: ConstructConnect

According to a monthly survey carried out for the Conference Board and The Business Council, CEO confidence is currently the highest it has ever been, or at least dating back to when attempts to measure it began in 1976. But expectations of exceptional growth prospects are being tempered by limitations arising from: (a) shutdowns necessitated by critical parts shortages; (b) rapidly climbing commodity and other input price increases; (c) difficulty in recruiting qualified workers to fill manpower requirements; and (d) bottlenecks in transportation delivery systems.

The business community has been expressing an understanding that two ways to resolve its critical problems are through higher wages and more capital spending. The additional investment may initially be in the means to continue riding the wave of technological advancement that has accelerated during the past year-and-a-quarter’s health crisis. In many instances, however, demands for new equipment and more backroom support services will lead to bigger ‘footprints’, which is just another way of saying construction.

Consumers, while more than normally optimistic, are not feeling quite as enthusiastically exuberant as CEOs. Their ardor is being held back by vanishing government income support measures and inflation that’s marching upwards once again, led by the price of gasoline.

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 Article source: ConstructConnect+

Canada’s Labor Market Hopes on Hold

In May, for the second month in a row, total employment in Canada retreated instead of stepping forward, putting a hold on hopes for an improving labor market. The latest month-to-month decline in total jobs was -68,000, coming on the heels of April’s setback of -207,000 jobs.

The nation’s seasonally adjusted (SA) unemployment rate in May worsened slightly to 8.2% from the prior month’s 8.1%. The not seasonally adjusted (NSA) U rate stayed flat at 7.1%.

Canada’s jobs recovery ratio, i.e., versus the big loss in employment between February and April of last year, stayed close to 80%, a level where it has hovered for the last several months.
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