I’m supposed to be writing about the economy, but how can I stay focused in the midst of a U.S. presidential election campaign.
Voting day may still be eight months away, in November, but there are distractions galore in the surround-sound coverage of the primaries and caucuses.
The economy has become a side-show event compared with what is going on in the electoral center ring.
Over the past decade-plus, the differences between the Democrats and Republicans have become deeper and more firmly entrenched.
Positions on the left and right have turned inflexible. Celebrity commentators in the media have played roles in marshalling legions of strident supporters.
Policy stances have proven intractable, yielding gridlock in Washington.
The crop that’s now being harvested is a disdain for politics as normally practiced.
Among Democrats, Hillary Clinton has been hard pressed to establish a lead over her rival, Bernie Sanders, a man who doesn’t hesitate to label himself a socialist.
On the Republican side, the candidacy of Donald Trump was supposed to peter out by last September, according to almost all the pundits.
The multi-family market is where the excitement is to be found in the U.S. and Canadian city housing starts markets.
Table 6 shows some strikingly large percentage gains in multi-family starts from 2014 to 2015, with New York (+109.6%) – already busting at the seams with high-rise towers – more than doubling its annual volume of groundbreakings.
Miami (+60.4%) and Dallas-Fort Worth (+54.4%) recorded year-over-year multi-unit starts increases that were ahead by more than half. While Miami has staged a nice recovery (to 16,000 units in 2015) in multi-unit starts since its disastrous level (only 1,600 units) in the Great Recession year of 2009, it still remains considerably below its 15-year previous best figure of 23,300 units in 2005.
Dallas, on the other hand, in 2015 (28,000 multi-family units) shot well past its prior most stellar year (18,400 units in 2008).
Boston (+42.5%), Los Angeles (+34.2%) and San Francisco (+30.5%), in 2015, had multi-family starts levels that were close to or better than one-third higher than in 2014. (more…)
In the previous Economy at a Glance, there was an examination of ‘total’ housing starts in the largest urban centers in the U.S. and Canada.
2015 ‘actuals’ and year-over-year percent changes were laid out in two tables for 12 cities south of the border and six on the northern side.
The figures are being called ‘starts’, although for the U.S. centers they are actually derived from residential building permits.
The city definitions are based on broad boundaries that include downtown cores and nearby suburbs with close commuting ties.
In this current EAAG, the focus will be narrowed to the single-family market.
Nation-wide in the U.S., single-family starts are now accounting for about two-thirds of total starts, with multiples making up the other 33%. (In Canada last year, the proportions were the reverse, 35% for singles and 65% for multiples.)
The share in the U.S. taken by ‘singles’ has dropped dramatically over the past several years. A decade ago, it wasn’t uncommon for singles to be as much as 80% of total starts.
Based on the latest ‘actuals’ from Statistics Canada, the spring 2016 forecasts, out to 2019, of construction capital spending − also known as put-in-place investment – have just been calculated by CanaData.
Versus the fall of 2015, the year-over-year projections have mostly been scaled back.
Grand total constant dollar (i.e., adjusted for inflation) construction will decline a further 3.1% in 2016 after a drop of 3.4% in 2015. 2017 will see a slight improvement of +1.0%, followed by +3.5% in 2018 and +4.3% in 2019.
In the fall of last year, the comparable percentage changes were: 2015, -2.2%; 2016, +0.5%; 2017, +2.7%; and 2018, +4.1%. There was no 2019 forecast at that time.
In current dollars, 2015’s grand total was $285 billion, or -2.4% compared with $292 billion in 2014.
After a further 1.8% decline in this current year, 2016 will chalk up a volume of slightly less than $280 billion.
Current dollar gains of 2.9% and 5.6% in 2017 and 2018 respectively will finally lift the total dollar value of all Canadian put-in-place construction activity above $300 billion two years from now.
This Economy at a Glance (EAAG) will look at home starts in major U.S. and Canadian cities, according to ‘totals’ (Part 1), plus single-family (Part 2) and multi-family (Part 3) markets.
The accompanying tables rank the dozen American and half-dozen Canadian cities by actual start levels in 2015 and year-over-year percent changes.
For both the U.S. and Canada, the cities are the broad designations (MSAs and CMAs) which include downtown cores plus all suburbs with close live-work commuting ties.
The website versions of these three articles include a wealth of graphs, since it is often true that a picture is worth a thousand words.
Nevertheless, here’s commentary on total new home groundbreakings in the 18 major cities.
In the U.S., the monster-sized market for total housing starts in 2015, at 86,400 units, was New York.
Two cities in Texas, Houston (56,900) and Dallas-Fort Worth (56,400), were in second and third places respectively, but way back.
Los Angeles (33,700) and Atlanta (30,000) placed fourth and fifth. (more…)
CMD announced today that January’s level of U.S. construction starts, excluding residential work, was $24.7 billion, an increase of 9.8% versus December. The nearly double-digit percentage increase was noteworthy since there is usually (i.e., average over 10-years-plus) a December-to-January decline, due to seasonality, of 8.5%.
Compared with January of 2015, the latest month’s starts level was +12.9%. Relative to average non-residential starts in January over the preceding five years, 2011 to 2015, the gain was +18.6%.
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.
‘Non-residential building’ plus ‘engineering/civil’ work accounts for a considerably larger share of total construction than residential activity. The former’s combined proportion of total put-in-place construction in the Census Bureau’s December report was 63%; the latter’s was 37%. (more…)
My favorite meal when traveling on business or pleasure used to be breakfast in the hotel where I was staying. In the ‘old days’, a morning repast was almost invariably cheap, plentiful and delicious.
Last summer, I took my family to Chicago for some wonderful sightseeing. We live in Toronto. (Our oldest child has moved out of the house and he and his girlfriend undertake their own travel adventures.)
The price of the breakfast buffet where we were registered downtown was $32.50 USD. For the four of us, that would have come to $130.00 USD.
Such a charge would have been steep enough on its own. Factor in the value of the Canadian dollar at the time, and the price was going to be $160.00 CAD.
Consider the further devaluation in the loonie since then, and the pain rises to $185.00 CAD.
That’s serious coinage. It’s nearly enough to rent a tuxedo, which I’ve always considered to be an excursion into luxury land. (more…)
The steep descent in the global price of oil began in early July 2014. It was rapidly accompanied by moderate to severe pullbacks in the posted charges for many other commodities.
Not by coincidence, late-summer 2014 was also the moment that launched many radical readjustments in currency values around the world.
Resource-supplying nations, suffering damage to their foreign trade balances, have been experiencing the most severe exchange rate declines ever since. Russia, Brazil, Australia and Canada are the prime examples.
The United States, viewed by international currency traders as a safe haven amidst all the turmoil, has seen its dollar move from strength to strength.
Nor has it hurt that as possibly the world’s most open economy, the U.S. marketplace has adjusted and recovered better than any other nation’s since the Great Recession. Indeed, U.S. employment and output have improved to such an extent that the Federal Reserve has moved out front among central banks in adopting a hawkish position on interest rates. (more…)
Spending time in U.S. stock markets lately has not been a walk in the park. Drooping equity prices are a symptom of assorted maladies. The three that stand out most prominently are as follows. First, a great many people are worried about China’s economy and especially the state of its banking sector. There are thought to be way too many shaky loans in danger of crumbling if growth continues to decelerate. The subsequent drop in value of the yuan won’t be pretty.
Second, on account of a shockingly low international price for oil, investment in the U.S. energy sector has gone into a tailspin, affecting certain regions of the country more severely than others.
And third, the uplift in value of the U.S. dollar is limiting the ability of American manufacturers to win export sales. Some of the nation’s biggest firms are being negatively affected the most.
Following up on the subject of Canadian construction material costs, this Economy at a Glance concentrates on seven graphs.
Graph 1: Softwood lumber prices in Canada rose rapidly throughout 2012, but over the past three years, they have stayed mainly flat. The U.S.-Canada softwood lumber agreement (SLA), after being in effect for nine years, was allowed to expire in October of last year.
Participants in Canada wanted to see continuation of the SLA under the same terms as originally negotiated. The U.S. industry has been wishing for a re-calibration of provisions.
Under the SLA, quotas and/or export taxes were to be imposed on Canadian producers when prices fell below a benchmark range. Individual provinces were allowed to choose their own form of regulation. Additional disputes were argued on several occasions before the London Court of International Arbitration (LCIA).
Without the SLA, as shown by the long history of contentious wrangling prior to its 2006 implementation, there is considerable potential for legal action that will disrupt North American lumber markets. (more…)
