Construction Economic News

Clichés are often true and it is the case that a picture can be worth a thousand words.

No Longer Just About Megas ConstructConnect announced today that February 2023’s volume of construction starts, excluding residential work, was $33.0 billion, a decrease of -42.4% versus January 2023’s figure of $57.2 billion (originally reported as $57.0 billion).

At +311,000, the U.S. number on net jobs creation in February, as calculated by the Bureau of Labor Statistics, was okay. It was neither truly exciting nor in any way disturbing. It was down from the +504,000 performance in January, but it wasn’t the kind of figure that would signal a recession has arrived on everyone’s doorstep. And that’s what we’re all watching for, indications of slowdown in the economy that might take it into negative real (i.e., inflation-adjusted) GDP change territory. That’s not what was delivered in February’s jobs report.

Since the spring of last year, monthly total U.S. housing starts (annualized) have been on a downward trajectory. The weakness in housing starts is one of the chief arguments for speculation that a recession is just around the corner.

The accompanying table records the top 10 project starts in the United States for January 2023.

Clichés are often true and it is the case that a picture can be worth a thousand words.

Implications of Megaproject Proliferation ConstructConnect announced today that January 2023’s volume of construction starts, excluding residential work, was $57.0 billion, an increase of +13.9% compared with December’s figure of $50.0 billion (originally reported as $50.1 billion). January was another month with an extraordinary wealth of mega-sized project initiations (i.e., projects carrying estimated values of a billion dollars or more each.) More on this in a moment.

The dreaded and ballyhooed recession remains at bay for the moment. In fact, much of the recent news concerning the economy has been great. GDP growth at the end of last year was remarkably strong. Jobs creation is still supercharged. Unemployment rates are holding fast at minimal levels. Retail sales have been booming. ConstructConnect’s own construction starts statistics, supported by megaprojects, began 2023 with a bang. And inflation is continuing to abate.

In January, the United States recorded a big employment increase, +517,000 jobs. In the same month, and with a considerably smaller population base, Canada followed suit, +150,000 jobs.

As a follow-up to an article on U.S. construction material costs, the table and charts in this piece look at what has been happening in Canada. Generally speaking, the story in both countries is the same. While some inputs into construction are continuing to show price increases that are way up year over year, there are also instances of big declines. Furthermore, the trend over the latest three months decidedly features price retreats rather than advances.