Article source: ConstructConnect

• Canada’s Jobs ‘Claw-Back’ Ratio Now Exceeds 50%
• A 60.1% Jobs Recovery Ratio for Canadian Construction
• Alberta’s Labour Market Struggling; But so is Ontario’s

Canada’s Jobs ‘Claw-Back’ Ratio Now Exceeds 50%

In July, the total number of jobs in Canada rose by 419,000, according to Statistics Canada, bringing the cumulative figure for the latest three months to +1.661 million. June’s number was +952,000 and May’s, +290,000.

In March and April, with the economy immobilized by fear of the coronavirus, the shrinkage in the total number of jobs nationwide was a staggering -3.0 million.

The offset of +1.661 million since April compared with -3.0 million in March-April, yields a ‘jobs recovery’ ratio of 55.3%.

From the middle portion of Table 1, titled ‘Pandemic,’ it can be seen that Canada’s employment claw-back ratio of 55.3% is better than the 37.3% result for the U.S., although it should be noted that Canada’s jobs drop in March-April of -15.7% exceeded America’s -13.5%.

Read the rest of In July, Canada Added Less Than Half of June’s Jobs Increase

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In July, according to the Employment Situation report published by the Bureau of Labor Statistics (BLS), the total number of jobs in the U.S. climbed by 1.8 million (after gains of 4.8 million in June and 2.7 million in May) and the seasonally adjusted (SA) unemployment rate eased to 10.2% (after readings of 11.1% in June, 13.0% in May and 14.4% in April).

The nation’s labor market was shredded by coronavirus-related shutdowns in early spring. It is now rebounding, but with less vigor than hoped for. Acting as a drag on jobs prospects have been de-railings of some state re-openings due to surges in new COVID-19 cases. As set out in Graph 1 at the end of this article, weekly initial jobless claims continue to exceed a million.

The big question is: “Where does the U.S. now stand with respect to employment recovery since February-to-April’s precipitous drop?”

Many of the most relevant numbers on the U.S. jobs recovery appear in Table 1.

Read the rest of Decent, but Decelerating, U.S. Jobs Recovery in July

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A Faint Echo of Normalcy in Hospitality Sales?

In the U.S., retail and food services sales are combined in a single monthly report from the Census Bureau. Also, the data is relatively current. Latest results are for June 2020.

In Canada, ‘retail sales’ appear in one report, but one must chase down ‘food services and drinking place’ sales from another location. Also, the Canadian information is somewhat ‘stale’. For example, the latest Canadian data is for May 2020. Nevertheless, it’s what’s available.

Year-over-year ‘restaurant and bar’ sales for Canada and the provinces are set out in the interactive graph appearing below. By now, it’s well-known that the biggest job losses in the economy resulting from the coronavirus contagion and ‘remedial’ distancing have occurred in the hospitality sector. Graph 1 offers further confirmation.

As recently as February, nation-wide ‘food services and drinking place’ sales were upbeat, +3.4% year over year. In March, though, circumstances altered significantly. The total Canada figure became -36.2% y/y. Furthermore, all provinces were affected to nearly the same degree. The year-over-year percentage declines were in a narrow range, moving from -30.4% y/y for Nova Scotia to -38.4% for Quebec.

Read the rest of Canadian Retail & Food Services Sales in May Show Some Recovery

Article source: ConstructConnect

Average annual U.S. ‘real’ (i.e., after accounting for inflation) gross domestic product (GDP) growth for the latest 20 years (2000 to 2019 inclusive) has been +2.1%; and for the past 10 years, +2.3%. The latest ten-year (2010 to 2019) annual average isn’t biased downwards by the 2008-2009 recession.

The eight states with the fastest annual average GDP growth rates over the past ten complete years have been: North Dakota, +4.7%; Washington, +3.6%; Texas, +3.5%; California, +3.3%; Utah, +3.2%; Colorado and Oregon, each at +3.0%; and South Carolina (+2.5%).

North Dakota’s rapid growth was front-end loaded. Bakken shale oil development sent the state’s output level soaring in 2011 and 2012, to the tune of +11.3% and +22.4% respectively. During the past seven ‘quieter’ years, North Dakota’s annual average GDP gain has been only +0.8%.

Only two states were burdened with annual average GDP growth rates that were negative in the past decade, Wyoming (-0.5%) and Alaska (-0.2%). Two others, though, managed only minimal headway, Connecticut and Louisiana, both at +0.1%. Mississippi and Delaware also didn’t have much to celebrate, each at +0.5%.

Read the rest of Prior to and in Midst of Pandemic, which U.S. States doing Best?

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Midsummer 2020 will forever be known as a historic time for U.S. economic data releases. On this date, July 30th, the Bureau of Economic Analysis (BEA) has published its estimate of Q2 versus Q1 gross domestic product (GDP) change, annualized (i.e., extended for a full year), and it’s a searing drop of -32.9%.

Dealing with the coronavirus outbreak has exacted a terrible toll. Over the past four months, one-third of the U.S. labor force has been laid off, furloughed, or suffered drastic reductions in pay and hours worked. And now it’s been revealed that national output was cut by one-third from April-June versus January-March. Not to be forgotten, January-March 2020 relative to October-December 2019 was also in the red, -5.0%.

The most dramatic changes in GDP line items in the BEA’s ‘Advance Estimate’ report for Q2 2020 were as follows: ‘personal consumption expenditures,’ -34.6% q/q annualized; consumer expenditures on services, -43.5%; investment in nonresidential structures, -34.9%; investment in residential structures, -38.7%; exports of goods and services, -64.1%; imports of goods and services, -53.4%; and ‘final sales of domestic product,’ which omits the negative effects of the foreign trade shortfall, -29.3%.

From the investment figures above, it’s apparent that construction activity did not escape unscathed despite having the advantage of being judged ‘essential’ and allowed to proceed nearly everywhere in America, while other sectors were in lockdown.

Read the rest of A Mid-Summer GDP Shocker, -32.9%

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Article source: ConstructConnect

• Three Key Words: Congestion, Propensities and Mobility
• Residential Construction Outlook
• Nonresidential Building Construction Outlook
• Engineering Construction Outlook (scroll way down)
• Appendix A: ‘Starts’ versus ‘Put-in-place’ Statistics

U.S. put-in-place construction spending, during the coronavirus health crisis, has benefitted from the carryover of work begun last year. 2019 construction starts included an inordinately large number of mega projects valued at $1 billion or more each. There were 35 such projects last year, with a summed value near $80 billion, or 15% of nonresidential groundbreakings.

At the end of this piece is an appendix outlining the differences between ‘starts’ and ‘put-in-place’ statistics on construction activity.

ConstructConnect’s latest ‘put-in-place’ (PIP) forecasts are set out in the Table below and appear in a series of type-of-structure graphs. The graphs of ‘actuals’ and ‘forecasts’ also include Excel-generated trend lines.

Mostly, the trend lines capture only a loose approximation of how the data series moves over time. In a few instances, however, mainly among engineering sub-categories of work, there is a close relationship between ‘trend’ and ‘actuals/forecasts’. Those cases yield high R² values, a statistical term and calculation indicating close correlation.

Read the rest of Total U.S. Put-in-place Construction to be -4.5% in 2020 versus 2019

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With today’s June Employment Situation report from the Bureau of Labor Statistics (BLS), the U.S. economy has now clawed back 29% of the total number of jobs lost in March and April, when shelter-at-home directives were first enacted to deal with the coronavirus outbreak.

February was the last month when the total employment picture in America was ‘normal’. Two months later, with April’s labor market statistics, the total number of jobs in the country was down by 20.5 million.

The percentage change in total employment from February to April was -13.5%.

While far from being rosy, the jobs numbers are perking up a bit. Staged re-openings in states are the reason.

Whereas nation-wide total employment was -20.5 million jobs in April versus February, it is now -14.6 million (again, versus February). And while the percentage change in total employment in April compared with February was -13.5%, it is currently -9.6%.

Read the rest of U.S. Economy Claws Back 29% of Earlier Big Drop in Jobs

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As with most things pandemic-related, it’s hard to know where the cost of construction will land six months, or a year, or two years from now. Set out below are ten ways in which costing in the sector is likely to be impacted in the period ahead.

A Commodities Dependency for Materials:

(1) Commodities are the basic building blocks of everything, including materials used in construction. As an asset class, they will stay undervalued until the global economy picks up a great deal more steam than it is currently exhibiting. Over the past two decades, China has embarked on several massive infrastructure spending programs that have drawn in nearly half of world copper, nickel, iron ore (for steel), aluminum and cement/concrete supplies.

To kick-start its economy again, after a coronavirus-induced shutdown early this year, China has announced it will initiate another round of infrastructure spending. This time, though, most of the focus won’t be on building roads, transit projects, railways and airports. Instead, majority funding will go towards boosting the high-tech sectors expected to lead future gross domestic product growth. The emphasis will be on data centers, biotechnology and medical labs, etc.

The uplift in demand for and pricing of commodities from old-style infrastructure projects is well known. New-style infrastructure spending will shift the balance towards other inputs (e.g., lithium, cobalt, etc.), blunting ‘normal’ commodity price movements.

(2) A U.S. economic upturn, especially if residential construction is a primary driver, will have a significant impact in a couple of commodity pricing areas, primarily lumber and gypsum.

Read the rest of 10 Pandemic Impacts on Construction Costing

Lines That Sink, Bob Back up and Soar

Article source: ConstructConnect

There are some eye-catching results to be observed from the Census Bureau’s Advance Monthly Sales for Retail and Food Services, May 2020 report. After shopkeepers posted terrible results in April, there were some astonishing bounce-backs in May.

The following seven graphs mainly speak for themselves. There are lines that plummet severely and stay depressed. But there are also lines that sink sharply, then soar again. And in at least one instance, for nonstore retailers, there’s a curve that shoots directly upwards in a manner almost never seen anywhere else before.

U.S. total retail sales in May were +16.8% month to month, leaving them only -1.4% year over year. Much of the thanks for the m/m improvement goes to ‘motor vehicle and parts’ sales, which were +44.1% m/m, but still negative to the tune of -3.9% y/y. Auto sector sales accounted for the largest share of ‘total retail’ in May, at 22.1%.

Read the rest of May U.S. Retail Sales Back from the Brink