Article source: ConstructConnect

The vertical bars in Graph 1 tell the story of housing starts in the U.S. The monthly numbers of actual groundbreakings in units are seasonally adjusted at an annual rate (SAAR). ‘Annualized’ means they are projected from a single month to 12 months.

Graph 1 for the U.S. homebuilding market shows that beginning in April of last year, starts kept climbing in almost every subsequent period out to the end of 2020.

In 2021, however, the height of the vertical bars has stayed about the same. Only March’s 1.725 million units (SAAR) makes much of an impression. The levels in the other nine months of this year have ranged between 1.45 million and 1.65 million units. U.S. housing starts in 2021 have remained elevated but the growth momentum has dissipated.

Graph 2 makes clear that it’s the single-family market in the U.S. that has gone into a skid. From 2015 through the end of 2020 (and disregarding the coronavirus-related slump in the Spring of 2020), starts of ‘singles’ were on a strong upward trajectory. In 2021, they’ve mainly been on a downward slide, although in jagged fashion.

One handy way to look at starts is to compare January-to-October monthly averages (based on SAAR figures) for 2021 versus January-to-October 2020 results. On such a basis, the ‘total’ this year has been +16.3%, with singles at +16.8% and multiples, +15.0%. By regions, it’s been the Northeast at +29.0%, followed by the West, +18.8%; South, +14.6%; and Midwest, +10.8%.

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Article source: ConstructConnect

The Construction-related Plot Twists in U.S. and Canadian Retail Sales

U.S. Retail Sales take Exuberant Route

There are a lot of explanations for why souped-up inflation has become so troubling in recent months. Heading the list is supply shortages.

Graph 1 points out, however, that those supply shortages wouldn’t likely have reared up so glaringly if demand hadn’t veered so markedly from its normal pattern.

Instead, U.S. demand for retail goods has taken off in an unprecedented fashion. The curve for actual retail sales has soared way above a forward extension of the trend line that applied for 11 years from 2009 through 2019.

Moreover, in statistical terms, that trend line is an exceptionally good fit. From 2009 to 2019, there were no great deviations from ‘actuals’ to trend line.

The big jump in the savings rate, resulting from ‘organic’ austerity measures while sheltering at home (i.e., cutbacks in travel, entertainment, etc.), plus income support initiatives, have provided the fuel to stoke up the spending splurge.

It’s noteworthy, though, that the take-off in U.S. retail sales has not been matched in Canada.

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Article source: ConstructConnect

The U.S. foreign trade deficit deteriorated further in the latest month, sinking to -$972 billion USD in September 2021, an unwelcome record. The shortfall comes entirely in the trade of ‘goods’, -$1.178 billion. The ‘services’ balance, which includes business and tourism travel, plus between-country costs of transporting cargo, remained above water, +$206 billion USD.

Ongoing improvement in the ‘services’ surplus, though, has not been as assured as in the past. Uncharacteristically, there have been an equal number (5) of month-to-month declines in the ‘services’ balance so far this year as there have been advances (also 5).

It used to be the case that about half of the U.S. trade deficit originated with China. That was gradually suppressed to the point where China’s share shrank below 30% in June of this year. Since then, however, China’s proportion has edged back up again, reaching 35.6% in September.

Other nations have stepped forward to claim bigger slices. From the Euro area, Germany and Ireland held equal portions of the U.S. ‘goods’ trade deficit in September 2021, 5.5% each.

Ireland as such a big trading player is a bit of a surprise. It’s mainly due to U.S. purchases of Irish pharmaceuticals, with some ‘potent’ recreational beverages in the mix as well.

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Article source: ConstructConnect

Among ConstructConnect’s Top 10 project starts list for October are two that seem perfectly in sync with the times in which we’re living. For much of the past year-and-a-half, many of us have been cooped up at home as a precaution against contracting the coronavirus. Some of us have gone on fitness regimes; and we’ve all been aware, whether embracing it or not, of the extraordinarily swift breakthroughs made in vaccination protection.

As a direct result, pharmaceutical company Pfizer has just broken ground on a nearly half-billion-dollar modular aseptic processing facility in Michigan. And fitness equipment company Peloton has begun foundation work for a $400 million plant in Luckey, Ohio, situated south of Toledo.

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Article source: ConstructConnect

The $1.2 trillion infrastructure bill, even though the dollars going towards tangible projects will be slightly less than half that amount (approximately $500 billion), and the spending will be spread out over five years, is no small matter.

Current annual spending on what might be termed ‘hard’ infrastructure (i.e., mainly engineering works such as roads, bridges, transit systems, sewers, watermains, treatment plants, communication systems and power) will be about $350 billion.

Adding in ‘soft’ infrastructure (schools and hospitals) raises the annual ‘actual’ figure close to $500 billion, but educational and medical facilities are not a primary focus of the newly passed package.

The $500 billion mentioned in the opening paragraph relative to $350 billion usually allocated per annum suggests the plan is to squeeze another year-and-a-half’s worth of spending into the next five years.

This will be wonderful stimulus for the segments of construction that lean towards ‘civil’ works but it will also mean that the pressures lifting steel and other key material input prices won’t be easily relieved.

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Article source: ConstructConnect

The U.S. total jobs increase in October was +531,000 according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). A gain of more than half a million would have been met with cheering in any month prior to the pandemic. And it’s better than September’s +312,000 and August’s +483,000. But it still leaves total employment in the U.S. significantly below where it was in February 2020, just before COVID-19 touched down.

The total number of U.S. jobs at present is 148.3 million. Twenty months ago, in February 2020, the total number of jobs in the nation was 152.5 million. The difference is a remaining shortfall of -4.2 million positions.

The all-jobs claw-back ratio (i.e., the number-of-jobs rebound since April 2020 compared with the big number-of-jobs drop from February to April 2020) is now 81.2%. The jobs recovery ratio in the services sector is better at 84.9%.

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Article source: ConstructConnect

U.S. housing starts, as an average of the seasonally adjusted and annualized (SAAR) monthly figures to date in 2021, have been ahead by almost a fifth (+18.5%) compared with the same January-to-September period of 2020.

Versus the first three quarters of 2019, they’ve been even more elevated, +26.8%, or up by a quarter.

In the latest individual month, though, U.S. residential groundbreakings of 251,000 units were +7.4% year over year, but -1.6% month to month.

Graph 1 makes clear that while monthly U.S. homebuilding starts have been relatively strong throughout this year so far, they have also flattened. The level of starts has shown little variability from month to month, most often resting just under 1.6 million units.

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