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 » December’s Biggest U.S. Jobs Gains Were in Two Consumer Spending AreasJanuary 22nd, 2020 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect A Dampening of Euphoria May Be WarrantedEuphoria concerning the U.S. economy, as demonstrated by record-setting stock market indices, won’t be dampened much by the just-released and somewhat tame Employment Situation report from the Bureau of Labor Statistics. The total number of American jobs in December rose by a lukewarm +145,000. Also, November’s jobs total was revised downwards slightly, by -14,000.
Nevertheless, the monthly average climb in U.S. employment in full-year 2019 was off by one-fifth compared with full-year 2018, +176,000 as opposed to +223,000. Graphs 1 and 2 have been derived from the Job Openings and Labor Turnover Survey (JOLTS). Graph 1 highlights that while total job ‘openings’ in the U.S. economy, expressed as both a level and a rate, remain quite elevated, they have been easing off a bit over the past couple of years. Also, ‘hires’, as captured in Graph 2, appear to have been moving sideways more than upwards. Consumer Calling the Shots in New EmploymentA historically low unemployment rate will render jobs advances, as seen so far in this economic upturn, harder to achieve. In turn, slower employment pickups will lead to a deceleration in consumer spending growth. Read the rest of December’s Biggest U.S. Jobs Gains Were in Two Consumer Spending Areas A Slowing Economy’s Impact on ConstructionJanuary 7th, 2020 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect ConstructConnect expects growth of the U.S. economy to slow in 2020 and 2021, before picking up steam once again in 2022. Total construction activity, as measured by put-in-place capital spending, will be negatively affected to some degree, although it will receive support from homebuilding work that is generating ‘new shoots’ and mega projects that are underway and planned in the industrial and heavy engineering type-of-structure categories.
ConstructConnect calculates and publishes ‘starts’ statistics. But this article features put-in-place (PIP) numbers that come from the Census Bureau. ‘Starts’ focus on projects which break ground in any given month. The PIP approach, however, is analogous to monitoring progress payments as projects proceed over several months or even years. PIP numbers follow behind, or lag, up-front ‘starts’ statistics. They are less volatile than ‘starts’, with smaller amplitudes between peaks and troughs. Best Trend Line ‘Fits’ Are in Engineering ConstructionConstructConnect’s PIP forecasts are set out in Graphs 1 through 20. Each graph shows ‘actuals’ from the Census Bureau through 2019 (although 2019 is an estimate based on year-to-date ‘actuals’ through October) and projections for 2020-2022 made by ConstructConnect. Each graph also contains an Excel-generated trend line out to 2022. In many instances, the trend line offers little more than a loose visual guideline to the pattern of the PIP numbers. But in some cases, the trend line captures the path of the ‘actuals’ and forecasts to a striking degree. 9 Mid-December Economic NuggetsDecember 19th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect (1) U.S. GDP Growth in Q3 Similar to Q2 and Slower than in Q1With private investment, particularly in nonresidential structures, and net exports of goods and services acting as drags, U.S. ‘real’ (i.e., adjusted-for-inflation) gross domestic product (GDP) growth turned in a relatively quiet performance in 2019’s Q3, +2.1% annualized. The +2.1% result was the tiniest bit better than Q2’s +2.0% but was a slowing from Q1’s +3.1%.
November’s Jobs Reports – U.S. Still Upbeat; Canada Suffers SetbackDecember 9th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect November’s U.S. employment report from the Bureau of Labor Statistics (BLS) records a net increase in the nation’s jobs count of +266,000. Such a large gain, however, is somewhat distorted by a +54,000 increase in manufacturing jobs that comes on the heels of a -43,000 decline the month before. The big swing from one month to the next was mostly due to the onset of the strike at General Motors in October, followed by resolution four weeks later.
Therefore, the number carrying more significance for November’s jobs picture is the impressive uptick in private services-providing jobs, +206,000. While the average monthly increase in total jobs in America to date this year has been +180,000, down from +223,000 through the same January-November period of last year (i.e., -19%), the pullback in ‘services’ jobs has been far less severe, +149,000 compared with +161,000 (i.e., -7%). Both the seasonally adjusted (SA) and not seasonally adjusted (NSA) unemployment rates stayed extremely tight in the latest reporting month, 3.5% and 3.3% respectively. The SA rate was down from 3.6% in October; the NSA rate was the same as in October. Read the rest of November’s Jobs Reports – U.S. Still Upbeat; Canada Suffers Setback The U.S. Jobs Story and Ghosts of Recessions PastDecember 6th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnectTotal Jobs Level Relegates Dark Days to PastThe U.S. economy has been so outstanding at creating jobs over the past ten years that now is a good time to stand back and assess where, among industries, the pickup has been most remarkable and whether there are currently signs of general easing.
What’s also readily apparent, however, is how the past-20-years period, from a number-of-jobs point of view, has split into distinct decades. Total employment at the end of 2009 was slightly less than it was in January 2000. By way of contrast, from January 2010 on, the jobs count has done nothing but ascend. Read the rest of The U.S. Jobs Story and Ghosts of Recessions Past The Census Bureau’s Total Put-In-Place Construction Figure Is SleepwalkingNovember 8th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect In the latest month, total U.S. put-in-place construction spending, as measured by the Census Bureau, was -2.1% year to date (ytd ‒ i.e., Jan-Sept 2019 versus Jan-Sept 2018). As for the total’s two major sub-components, residential (with a 40% share) was in decline, at -7.9% ytd, while nonresidential (with a 60% share) was modestly ahead, +2.2% ytd.
A Flatlining in the Total Construction CurveGraph 1 shows a flatlining in the level of total U.S. PIP construction dollars over the past two years, and maybe extending back three years. 2018 and 2019 have been only a little better than 2017. U.S. October Jobs Growth Not as Underwhelming as First AppearsNovember 5th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Revisions to Past Data Paint Better PictureThe headline figure on U.S. net jobs creation in October, as recorded in the latest Bureau of Labor Statistics (BLS)’s Employment Situation report, was a rather tepid +128,000. But as has occurred on several other recent occasions, there were significant revisions to past data that brighten the picture considerably.
Nevertheless, there has been a deceleration in U.S. jobs growth this year. The monthly average increase in employment through the first three quarters of 2018 was +226,000. From January through September of 2019, the monthly average gain has been +167,000, a reduction of one-quarter (-26.0%). Read the rest of U.S. October Jobs Growth Not as Underwhelming as First Appears For First Time in 2 Years, Canada’s Quarterly GDP Growth Beats U.S.October 21st, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect
Aided by Exports, Canada’s GDP Growth Soared in Q2After managing only weak ‘real’ (i.e., after adjustment for inflation) gross domestic product (GDP) growth in the final quarter of last year and the first quarter of this year, Canada’s economy shifted into a higher gear during the latest three months.
The boost to growth in Q2 came mainly in foreign trade, as exports of goods and services were +13.4%, while imports retreated by -4.0%. Energy products led the export strength. For the first time in two years, Canada’s quarter-to-quarter GDP change beat the U.S., +3.7% to +2.0%. For seven straight quarters, from Q3 2017 to Q1 2019 inclusive, the U.S. had the advantage over Canada. In Canada, household spending in this year’s second quarter advanced by a tepid +0.5% annualized. Nevertheless, consumer spending as a share of GDP has crossed above the halfway point. In 2018, for the entire year, it was 56.6% of GDP and in Q1 and Q2 of this year, it has been 56.9% and 56.5% respectively. Read the rest of For First Time in 2 Years, Canada’s Quarterly GDP Growth Beats U.S. 9 Mid-October Economic Nuggets—With an Emphasis on Manufacturing’s StrugglesOctober 17th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Recently, there has been an easing of tensions in two key areas impacting the global economy. The U.S. and China have reached a first phase agreement towards resolving their trade disputes and the U.K. and E.U. are speaking again with the goal of avoiding a ‘hard’ Brexit. A new negotiated arrangement would alleviate the pain from the U.K withdrawing ‘cold turkey.’
At the same time, though, there are multitudinous geopolitical hot spots around the world. Turkey’s military incursion into northern Syria is of particular concern and potentially most destabilizing. Furthermore, an inquiry into the impeachment of the U.S. President has gained surprising traction. Some polls indicate more than half of Americans support such a measure. No doubt, these are interesting times. With the foregoing as backdrop, there are the following additional nuggets to be gleaned from the latest public and private sector data releases. (1) Initial Jobless Claims Return to BullishWhen watching for signs of a slowdown in the U.S. economy, one of the first flashing lights will be a worsening in the weekly ‘initial jobless claims’ number. In the second half of September, it seemed that such an occurrence was underway. For September 21st, the initial jobless claims figure increased to 215,000 from 210,000 the week before. Then on September 28th, it rose further to 220,000. A worrying trend appeared to be underway. But in the latest report, for October 5th, it eased again—which is to say, it improved—to 210,000. When the figure climbs back above 240,000, a level not seen in several years, it will be time to pay more attention. Read the rest of 9 Mid-October Economic Nuggets—With an Emphasis on Manufacturing’s Struggles Canadian Jobs Creation Going Gangbusters in August and SeptemberOctober 15th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Lowest Core-Aged Male Unemployment Rate in 40 YearsOn top of the 82,000 net new jobs that were created in Canada in August, another +53,000 were added in September, according to the latest Labour Force Survey report published by Statistics Canada. The total for the past two months, therefore, has been +135,000, a remarkably strong advance.
The total increase in employment in Canada through the first three quarters of 2019 has been +358,000, way above January-to-September 2018’s figure of +98,000. The average monthly gain to date this year has been +40,000, more than three-and-a-half times larger than 2018’s comparable number of +11,000. Canada’s seasonally adjusted (SA) unemployment rate in September tightened another couple of notches to 5.5% from 5.7% in August. It was also down from September 2018’s 5.8%. On a not seasonally adjusted (NSA) basis and adopting the same calculation methodology as in the U.S., Canada’s jobless rate in September was only 4.1%, its lowest reading this century. Also, the 4.1% figure for Canada was not greatly different from the 3.3% NSA level recorded in the U.S. Read the rest of Canadian Jobs Creation Going Gangbusters in August and September |
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