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 » Explosive Jobs Growth in Canada’s April Labour Force ReportMay 14th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect Canadian total employment shot up by +106,000 jobs in April, and the nation’s unemployment rate declined to 5.7%, according to the latest Labour Force Survey findings from Statistics Canada.
March’s jobless rate had been 5.8%. The month-to-month improvement in the out-of-work proportion would have been greater if not for the fact that the ‘participation rate’ climbed from 65.7% to 65.9% between the third and fourth months of this year. (A higher participation rate means that more people are actively on the hunt for jobs.) The average monthly gain in total employment in Canada through the first third of 2019 has been +55,000, a robust hike. From January to April of last year, the average monthly change in the total Canadian jobs count was -2,000. Since April 2018, total employment in Canada has risen by +426,000 jobs, a notable achievement. Read the rest of Explosive Jobs Growth in Canada’s April Labour Force Report U.S. Put-in-place Construction Spending Hits a Soft SpotMay 13th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect Total U.S. put-in-place construction spending, after increasing steadily (although slowly) for seven years, from 2011 through 2017, has lost upwards momentum over the past year and a bit. The cause of the overall weakness has been a retreating residential sector. Nonresidential has continued to exhibit a decent degree of uplift.
For various type-of-structure categories of construction, the charts in this article showcase three data sets – (1) seasonally adjusted (SA) monthly ‘current’ dollar volume levels (where ‘current’ means not adjusted for inflation); (2) month-to-month percent changes in the dollar volume; and (3) year-over-year percent changes in the dollar volume. As shown in Graph 1 below, total spending on U.S. construction reached its zenith in May of last year, at $1.324 trillion. Since that peak, it has fallen by 3.2%, to land at $1.282 trillion in the latest month for which data is available, March 2019. The average of month-to-month percent changes for total U.S. put-in-place construction spending during the past ten years has been +0.4%. In March 2019, the month-over-month figure was in negative territory, at -0.9%. Over the past 10 years, the average of year-over-year percent changes recorded each month for total put-in-place construction has been +4.2%. In March 2019, the year-over-year change was -0.8%. The ‘glory days’ for U.S. put-in-place construction have, for the moment at least, receded. Total put-in-place construction was doing its best between 2012 and early 2017, when the y/y percent change curve was consistently above the 10-year average line, as seen in the lower portion of Graph 1. Recently, U.S. put-in-place construction has fallen off its earlier faster pace. Read the rest of U.S. Put-in-place Construction Spending Hits a Soft Spot U.S. Labor Market Strength Continued to Impress in AprilMay 7th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect President Trump will be of two minds when he sees the latest labor market numbers from the Bureau of Labor Statistics (BLS). April’s Employment Situation report records another month of exceptional jobs growth, +263,000, and a notable decline in the unemployment rate to only 3.6%, which is as low as that metric has been in half a century. Furthermore, 3.6% was the seasonally adjusted (SA) rate. The not seasonally adjusted (NSA) jobless level was even tighter, at 3.3%.
But the good news with respect to jobs means that there is now even less likelihood that the Chairman of the Federal Reserve, Jerome Powell, will pay heed to the President’s advice to lower interest rates. The needle on the central bank’s ‘yield meter’ has undoubtedly swung away from mildly dovish towards perhaps hawkish once again. Through the first one-third of 2019, America’s monthly average (net) jobs creation has been +205,000, a quite solid level of increase. But placing it in perspective, it’s still -6.7% compared with January-to-April 2018’s comparable figure of +220,000. Read the rest of U.S. Labor Market Strength Continued to Impress in April Prolonged Streak of U.S. Beating Canada in Q/Q GDP GrowthMay 3rd, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect Explanation of Quarterly and Annual GDP Percent Change CalculationsThe mathematics employed to calculate ‘real’ gross domestic product (GDP) levels and rates of change are more convoluted than one might suppose. For a new quarter, GDP line items (e.g., consumption, investment, government spending and exports/imports), after removing the effects of inflation, are added up and adjusted for seasonality. They are also expressed as if they are annual results – i.e., the quarterly figures are ‘blown up’ to a corresponding annual level.
The ‘official’ GDP figure for any year is the average of the levels for the four quarters within that year and the year-to-year growth rate is the percentage change between annual averages. The figure most often quoted by the press, however, is a quarter-to-quarter GDP growth rate annualized. Such a number compares latest-quarter GDP with previous-quarter GDP to derive a percentage change. Then that percentage change is compounded to the power of four (i.e., ‘annualized’) to account for four quarters in a year. Read the rest of Prolonged Streak of U.S. Beating Canada in Q/Q GDP Growth A Chill in U.S. February Employment Numbers, Canada’s Performance PerkierMarch 8th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect February’s Employment Situation report from the Bureau of Labor Statistics delivered the kind of U.S. total employment change, month to month, that we have become unaccustomed to seeing. Net jobs growth was quite weak, at only +20,000. It’s been 17 months since the figure was comparably low, +18,000 in September 2017.
Over the last several years, the month-to-month jobs gain has usually been at least +175,000, often exceeding +200,000. In the first month of this year, January, it was +311,000. On the brighter side, the unemployment rate in the latest month improved to 3.8% from 4.0% in the prior period. There was only one major industrial sector with a substantial pick-up in nominal number of jobs in January, ‘professional and business services,’ +42,000. The staffing increases were evenly and widely spread among segments of the sector (e.g., accounting, design, computer, and help-wanted services). ‘Education and health services’ added just 4,000 jobs, but that was because education services declined by -19,000 jobs. ‘Health care and social assistance’ wasn’t shy about hiring, lifting its combined payroll by +23,000. Read the rest of A Chill in U.S. February Employment Numbers, Canada’s Performance Perkier 2018 Residential Construction Market Highlights − U.S. and CanadaMarch 7th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect Issuance of year-end data on U.S. new homebuilding activity was delayed due to the partial government shutdown which kept Census Bureau workers away from their desks.
Over the past month, however, there have been diligent catch-up efforts and December’s preliminary residential ‘starts’ and ‘permits’ numbers are now available. There are ‘starts’ at the national level; but for states and cities, the figures are based on building permits. This article will mainly concentrate on new home groundbreakings in America’s largest metropolitan statistical areas (MSAs). ‘Permits’ in units will be accepted as equivalent to ‘starts’. ‘Permits’ are first published by the Census Bureau, then repackaged in a more user-friendly form by the National Association of Home Builders (NAHB). When Canadian statistics are mentioned, they have been made available by Canada Mortgage and Housing Corporation (CMHC) and they are ‘starts’. Read the rest of 2018 Residential Construction Market Highlights − U.S. and Canada Rankings of States and Provinces by Roadwork Construction StartsMarch 4th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect The table and maps accompanying this article feature comparisons of highway, street and roadwork construction starts in all the states, plus District of Columbia, in two ways: (1) by dollar-volume level, taking the annual average over the past two years (2017 and 2018); and (2) per capita (i.e., the dollar volume in (1) divided by each individual state’s population).
In some states, there can be considerable variation in the dollar volume of roadwork starts from one year to the next. Therefore, it seems only fair to smooth the series out a bit, and hence the reason for utilizing a latest-two-years average. On the left-hand side of Table 1, there is a ranking of all states and D.C. according to their level of roadwork construction starts. Sixteen states have exceeded an annual average of $1.0 billion over the past two years and they are highlighted in Map 1. Washington state, at $995 million, and New Jersey, at $980 million, just missed the cut. Read the rest of Rankings of States and Provinces by Roadwork Construction Starts Minimal Progress in Fixing U.S. and Canadian Foreign Trade DifficultiesFebruary 27th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect Early in February, there should have been the release of December 2018 foreign trade statistics for both the U.S. and Canada. The publication schedule has been thrown off track, however, by the 35-day partial U.S. government shutdown, which kept Census Bureau workers off the job.
Since three-quarters of Canadian exports are shipped to the U.S. and two-thirds of Canadian imports are drawn from the U.S., Statistics Canada felt it could not publish accurate numbers either. Therefore, the latest statistics available for study, both south and north of the border, are for November. A statement has been issued that the target date for dissemination of December findings is March 6th. Nevertheless, there is much to be learned from the material that is at hand. The bottom line is that there has been minimal progress lately in fixing significant U.S. and Canadian foreign trade difficulties. Graphs 1 and 2 tell the story. Canada’s trade deficit (annualized) in November was -$25 billion CAD; America’s was a massive -$592 billion USD. Read the rest of Minimal Progress in Fixing U.S. and Canadian Foreign Trade Difficulties Series (7 of 7): Rankings of States by Industrial Sub-Sector Jobs – ConstructionFebruary 22nd, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect This article is the seventh, or final one, in a series of seven that examines key industrial sectors to determine where they are most significant regionally. Rankings of state strength in each industrial sub-sector are based on both ‘weight’ and ‘concentration’ of relevant employment. ‘Weight’ is simply the number of jobs in the industrial sub-sector in each state. ‘Concentration’ is each state’s number of jobs in the sub-sector divided by the state’s population. In effect, it’s a ‘per capita’ figure, except that it’s expressed as number of jobs per million population. By ‘weight’, the states with the largest populations are almost always high in the rankings. The rankings by ‘concentration’, however, often expose some unexpected winners. Read the rest of Series (7 of 7): Rankings of States by Industrial Sub-Sector Jobs – Construction A Slow Beginning for 2019 Construction StartsFebruary 13th, 2019 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect ConstructConnect announced today that January’s volume of construction starts, excluding residential work, was $27.8 billion, a change of -6.7% compared with December 2018’s level of $29.7 billion. The latest month-to-month adjustment was in close alignment with the usual shift in starts volumes between December and January, due to seasonality, of -8.5%.
Nonresidential starts in January 2019 relative to the previous five-year average for January, i.e., from 2014 through 2018, were -4.5%. January 2019 compared with January 2018 was -20.6%. At $35.0 billion, January 2018 managed an abnormally high volume of starts activity. The starts figures throughout this report are not seasonally adjusted (NSA). Nor are they altered for inflation. They are expressed in what are termed ‘current’ as opposed to ‘constant’ dollars. ‘Nonresidential building’ plus ‘engineering/civil’ work accounts for a larger share of total construction than residential activity. The former’s combined proportion of total put-in-place construction in the Census Bureau’s latest report, for November, was 59%; the latter’s was 41%. Read the rest of A Slow Beginning for 2019 Construction Starts |
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