The AEC Lens 
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More » Quarterly U.S. Put-in-Place Forecast Report, Summer 2021June 25th, 2021 by Alex Carrick, Chief Economist at 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. Read the rest of Quarterly U.S. Put-in-Place Forecast Report, Summer 2021 Latest U.S. and Canadian Housing Starts in 10 GraphsJune 23rd, 2021 by Alex Carrick, Chief Economist at ConstructConnect
The ten graphs in this article update the latest housing starts information for the U.S. and Canada through May 2021. Both countries are currently experiencing new home building booms. Super low mortgage and secondary-financing interest rates, a build-up of savings while being locked down during the pandemic and the pronounced shift to working from home and escaping from crowded downtown cores have been some of the major contributors to the uptick in new accommodation demand. U.S. housing ‘starts’ appear to have settled in around 1.6 million units per month, seasonally adjusted and annualized (SAAR). The Canadian monthly average seems to be about 270,000 units, although twice this year the number has risen much higher, 308,000 in January and 333,000 in March. The case for saying the ‘boom’ has been stronger in Canada than in the U.S. can be made in simple fashion. Monthly average starts on a SAAR basis in the U.S. year to date (Jan-May 2021) are an impressive +22.5%. The comparable change for Canada, though, is an even more outstanding +48.3%. Read the rest of Latest U.S. and Canadian Housing Starts in 10 Graphs ConstructConnect’s ‘Expansion Index’ Captures Construction HesitancyJune 18th, 2021 by Alex Carrick, Chief Economist at 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. Read the rest of ConstructConnect’s ‘Expansion Index’ Captures Construction Hesitancy Latest PPI Results Show Construction Material Cost Increases Still AlarmingJune 17th, 2021 by Alex Carrick, Chief Economist at 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. Read the rest of Latest PPI Results Show Construction Material Cost Increases Still Alarming 7 Mid-June Economic NuggetsJune 15th, 2021 by Alex Carrick, Chief Economist at 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. In May, Canada Disappoints Once Again on the Rehiring FrontJune 9th, 2021 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect+ Canada’s Labor Market Hopes on HoldIn 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. U.S. Half Million Jobs Increase in May still only Drop in BucketJune 4th, 2021 by Alex Carrick, Chief Economist at ConstructConnect
Big Grin Greets Big Pickup in Youth Employment In any pre-pandemic month, May’s U.S. total jobs count gain of +559,000 would have registered as outstanding. And I don’t want to belittle the achievement, especially since it soundly beats the previous month’s figure of +278,000. But as can be seen from Graph 1, even a swing of plus more than half a million appears as only a blip in the context of the month-to-month movements over the past year and a quarter. The seasonally adjusted (SA) unemployment rate in May improved to 5.8% from 6.1% in April. The not seasonally adjusted (NSA) unemployment rate downshifted to 5.5% from 5.7% the month previously. Young people are finding employment once again. The SA unemployment rate for individuals aged 16 to 19 brightened to 9.5%. And yes, ‘brightened to 9.5%’ is appropriate wording given that a year ago the SA unemployment rate for those just under aged 20 was 30.7%. Read the rest of U.S. Half Million Jobs Increase in May still only Drop in Bucket The Unexpected Tie-in Between Airline Travel and the Price of LumberJune 3rd, 2021 by Alex Carrick, Chief Economist at ConstructConnect
How can visiting Aunt Pat in Topeka have anything to do with needing a loan to purchase a two-by-four? Graph 1 conveys very good news. U.S. airline passenger traffic, as measured by Transportation Security Administration (TSA) checkpoint numbers, is solidly on the rebound. Over the latest 14 days ending June 1st, the number of people taking to the air has been 70% of what it was during the same time frame in 2019. While that still leaves considerable room for improvement, consider that for the same 14 days last year, the comparison with 2019 yielded a percentage level of just 12%. Read the rest of The Unexpected Tie-in Between Airline Travel and the Price of Lumber Volatility the Name of the Game with Latest Economic Data ReleasesMay 27th, 2021 by Alex Carrick, Chief Economist at ConstructConnect
Read the rest of Volatility the Name of the Game with Latest Economic Data Releases Booms in U.S. & Canadian Housing: One Tentative, the Other BoisterousMay 25th, 2021 by Alex Carrick, Chief Economist at ConstructConnect
When presenting housing starts for the U.S. and Canada, the Census Bureau and CMHC first seasonally adjust monthly ‘actual’ units and then annualize them, to arrive at what are termed SAAR (seasonally adjusted and annualized) figures. ‘Annualizing’ takes the monthly number and projects it out over 12 months. Graph 1 |
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