Note: The graphs (‘New Graphs’ and ‘Canada Graphs’ tabs in excel file) are integral to the article, but the text is actually standalone.
There’s a diversity of ways to assess the strength of an industry within the broader context of the overall economy. Stock market investors prefer to look at profit levels and price-earnings ratios. Financial institutions focus on debt and cash flow. Economists often choose jobs levels.
Whether or not employment is on the upswing can give a pretty good indication of which way firms in a particular sector are leaning in terms of investment spending or construction projects.
Previous Economy at a Glances have featured employment-level charts for key U.S. sub-sectors. Similar graphs have now been developed for Canada and they are featured in this EAAG.
The underlying data for the U.S. and Canada comes from surveys of employers. A significant point of difference, however, is that the U.S. numbers are seasonally adjusted. For Canada, they are moving 12-month averages of not seasonally adjusted (NSA) figures, placed in the latest month. (more…)
Part 1 of this Economy at a Glance introduced the topic of a dozen major ways in which the structure of society and the framework of the global economy are changing beyond what humankind has ever experienced before.
In Part 2, let’s dive right in with transition number (4), which will then lead organically into (5) and beyond.
(4) Rock star central bankers: Given that establishment politicians have been passing out of favor, maybe it’s just as well that central bank Chairmen and Governors have stepped into the spotlight.
Changes to taxation, spending and other fiscal tools to guide the economy have fallen out of favor and almost the whole responsibility for managing output, employment and other prosperity indicators has fallen on each nation’s central bank.
I’m writing this article on May 1, but it’s not an April Fools’ joke. Sure, there have been other times in world history, during war or plague, when turmoil has been so intense as to test, to the limits and beyond, the fortitude of mankind and womankind.
Still, I’m not sure humanity has ever before been on the cusp of so many changes that are already, or are on the verge of, shaking up the ways in which we live and interact with one another; and govern our economic and social affairs; and inspire dreams about really and truly astonishing futures.
The notion for writing this article first came to mind on account of six or so major trends that I’m always mulling over when I write about the economy and the construction sector. Upon deeper reflection, the number of discernible seismic shifts quickly expanded to a dozen.
There may well be more. Feel free to contact me if you believe I’ve failed to mention something equally or more important.
The following 12 sections have also been inspired by the question I’m always asking myself and which I know is of prime concern to you as well. What will be the implications for the construction sector? (more…)
There’s going to be a lot of cheering about Canada’s March labour market numbers as reported by Statistics Canada. The latest Labour Force Survey shows a month-to-month pick-up in total employment of 41,000 positions and a jobless rate that fell 0.2 percentage points to 7.1% from 7.3% in February.
Furthermore, most of the overall jobs increase (+35,000) occurred in the usually more stable and higher-paying, and thus better quality, full-time category of work as opposed to part-time (+6,000) activities.
Plus, all the boost to employment was provided by the private sector (+65,000), as the public sector downsized slightly (-2,000). Self-employment (-22,000) staged a significant retreat.
Still, there were some real oddities in the rest of the figures. (more…)
North America’s major stock market indices have taken investors on a ‘theme park’ ride over the past 12 months − as can be seen from Graph 1. More often than not, it hasn’t been much fun.
There were substantial dips for all four indices – Dow Jones Industrials (DJI), the S&P 500, NASDAQ and the Toronto Stock Exchange (TSX) − in September of last year, followed by recovery for the U.S. series, and then another crater in the January-February period of this year.
Canada’s TSX stayed mainly down once it faltered in the fall of last year.
In the most recent month, however, there were notable improvements once again. At the close of trading in March 2016, the DJI, S&P 500 and NASDAQ were all within 1.0% of their levels achieved a year prior.
The TSX moved +4.9% during the month of March, but was still -9.4% year over year.
Worry has centered on the likely performance of corporate profits. It’s well known that in the energy sector, the low price of oil is taking a heavy toll on the revenues of exploration and extraction companies, as well as their service and material suppliers.
In March, the size of the U.S. labor force rose by nearly 400,000, as many working-age people who were previously on the sidelines jumped back into the job hunt.
As a consequence, the participation rate rose to 63.0%, a climb of 0.3 percentage points since the start of the year’s level of 62.7%.
Both developments are votes of confidence in possible employee prospects. They indicate more out-of-work individuals now feel they have a better shot at finding a welcoming face, corporate or otherwise, to pay them a living.
This notion received a boost from March’s month-to-month gain in the total number of non-farm jobs in the economy, +215,000, as reported by the Bureau of Labor Statistics (BLS).
Furthermore, the total employment increase was widely dispersed among industry categories, with payrolls in ‘education and health’ (+51,000) increasing the most; but with ‘retail trade’ (+48,000) and ‘leisure and hospitality’ (+40,000) not that far behind.
A significant milestone has just been reached in the U.S. labor market. For the latest week ending February 27th, America’s initial jobless claims figure was less than 300,000 for the 52nd week in a row.
That’s a whole year of strong success in keeping the number of people newly unemployed quite low. (In the Great Recession of 2008-2009, the number topped off at 670,000.)
Falling below their 300,000 benchmark level, rosy initial jobless claims automatically imply encouraging news from the Employment Situation Report published by the Bureau of Labor Statistics (BLS).
The BLS has just reported that in February, the total number of jobs in the U.S. rose by 242,000, where a gain of 200,000 or more is considered bullish.
The national unemployment rate stayed below 5.0% at 4.9%, the same as in January. A year ago, it had been 5.5%.
In another positive sign, the proportion of working-age people who actively sought employment in February moved a little higher, to 62.9%. This measure is called the ‘participation rate’ and it usually picks up when job prospects are good.
(On the flip side, when job prospects are abysmal, people stop looking for work and the result is a ‘discouraged worker’ effect.)
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.
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…)