Article source: ConstructConnect

Canada has become much more than a natural resource-based economy.

Nevertheless, it’s a huge error in appreciation to underestimate and undervalue how much the raw materials sector means to the nation, its industry, and its people.

The construction sector knows. It’s well aware that many of the largest projects ever undertaken have originated in remote sites related to harnessing, extracting, or moving natural advantages.

Furthermore, there’s a significant foreign trade tie-in that is crying to be better understood.

Coincident with the push to net zero emissions (NZE) by mid-century, the U.S. and Canada will be entering a new era of mega project construction. The U.S. has already embarked on this path. Canada will be following shortly.

Many of the largest projects either underway or about to be built will feature new or expanded facilities to replace imports (e.g., chipmaking and battery plants) or facilitate exports (e.g., LNG terminals).

The total dollar volume of Canada’s goods exports so far this year are up by close to +20% compared with January-October of last year. Table 1 shows year-to-date rankings and dollar-volume percentage changes for 26 key product categories. Some of the increases are astonishing.
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Article source: ConstructConnect

As the U.S. added 263,000 jobs in November, Canada stood by and watched in awe. The change in total employment north of the border in the latest month, according to Statistics Canada, was only +10,000 jobs.

On a little cheerier note for Canada, full-time employment in November rose by +51,000 jobs, although part-time staffing fell by -41,000. Full-time work is higher paying and more stable and is therefore judged to be of higher ‘quality’ when it comes to helping out the economy.

Canada’s headline, and seasonally adjusted (SA), unemployment rate is now 5.1%, down slightly from October’s 5.2%. The nation’s U rate not seasonally adjusted (NSA) is 4.6%. The NSA U rate calculated according to the same stringent standards as in the U.S., with respect to who is really truly trying their hardest to find work, is 3.8%. The 3.8% figure is not far off the 3.4% number south of the border.

November wasn’t a good month for hiring in the construction sector, however. The jobs loss in construction in the latest month, -25,000, exactly matched the gain in the prior month, +25,000.

The overall decline in construction employment in November occurred mainly in Alberta (-13,000 jobs) and British Columbia (-9,200).

It shouldn’t come as much of a surprise that construction employment is flattening. In a separate report on the cost of construction, Statistics Canada is laying out some truly stunning increases, which must be causing some owners to waiver when considering their capital spending plans.
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Article source: ConstructConnect

A Change has Come Over Stock Markets

Earlier this year, a terrible gloom descended on stock markets both at home and internationally. Fears of what rising interest rates would do to economies near and far sent investors hurrying to divest their holdings. The exiting was especially brutal from March through September.

But in the last two months there’s been a reversal. As of November’s closing, the DJI had regained 72% of its big drop. The TSX had reclaimed 59% and the S&P 500, 44%. Only NASDAQ’s revival of 25% has lacked much conviction.

The Bank of Canada has just increased its policy-setting overnight rate by 50 basis points (where 100 basis points = 1.00%), to 4.25%. It has indicated, however, that it may stand pat with respect to further rate hikes for the foreseeable future until it learns more about how events are shaking out.

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Article source: ConstructConnect

Much of the world may be taking a break as yearend approaches, but that doesn’t mean the economy is kicking back with eggnog and gingerbread cookies. Public and private sector data releases are pouring forth regardless and here are some of the nuggets to be gleaned.

(1) One indicator with a strong record for reliability concerning the health of the U.S. labor market is the weekly initial jobless claims figure released by the Bureau of Labor Statistics (BLS). A number above 300,000 generally correlates with high unemployment and recession. As the figure descends below 300,000, however, the labor market is tightening. Down around 200,000, the unemployment rate will be about as low as it ever manages to go. That’s where we are now and where we have been for quite a while. At times, during the last several months, the initial jobless claims number has threatened to move significantly higher. For example, it rose to 261,000 in mid-July of this year. But for the latest reported week, the one ending December 10^th, it was notably down again, at only 211,000.

(2) The U.S. not-seasonally-adjusted (NSA) unemployment rate is just 3.4%. The Canadian comparable figure is similarly minimal, 3.8%. This is despite the federal funds rate of the Federal Reserve having been lifted into a range of 4.00% to 4.25% and the overnight rate managed by the Bank of Canada moving up to 4.25%. Both central banks have made no secret of the fact they want to slow their home economies to rein in price inflation. The braking actions have dimmed business and consumer confidence, but they have not, as yet, knocked the stuffing out of either economy.
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Article source: ConstructConnect

Once again, there was little wrong with the U.S. labor market picture in the just released monthly update from the Bureau of Labor Statistics (BLS). November’s jobs creation figure was +263,000, not far off what it’s been in each of the three preceding months.

From August through November, the monthly increase in the U.S. total jobs count has ranged between +250,000 and +300,000, a tight and quite healthy band.

The dreaded recession, at least at the tail end of 2022, is still at bay as far as the overall labor market is concerned, although there are certainly well-publicized instances (e.g., Twitter) of new management taking action that has led to significant layoffs.

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