Construction Economic News

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.

The U.S. total number of jobs count rose by more than half a million in January, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). The climb in employment of +517,000 positions was double the increase in the preceding month of December.

Graph 1 below shows the moderation in construction material costs that has been taking place. There’s about a 50-50 split between items with year-over-year price increases versus those with y/y declines.

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

The accompanying table records the top 10 project starts in the United States for November 2022.

Megaprojects are 2022’s Story of the Year ConstructConnect announced today that December 2022’s volume of construction starts, excluding residential work, was $50.1 billion, an increase of +58.1% compared with November’s figure of $31.7 billion (originally reported as $31.1 billion). After a relatively quiet month for megaproject starts (i.e., those of a billion dollars or more each) in November, they came roaring back in the latest month.

Fighting through the headwinds of more restrictive interest rates, the U.S. economy managed another good month of jobs creation in December, +223,000, according to the Bureau of Labor Statistics. It should be noted, however, that the month-to-month increase in nationwide employment has been gradually diminishing over the past six months.