Construction Economic News

The August data released by the New York Federal Reserve for their Empire State Manufacturers Delivery Time Index pointed to a slight contractionary reading of -0.9. This marks the first time since COVID-19 that the Fed’s supply chain survey has pointed to faster supply chain performance.

ConstructConnect’s Expansion Index, a monthly measure of the dollar value of construction projects in planning compared to the same month one year ago, registered 10% overall expansion in Canada and 16% for the United States for the month of August 2022.

The problem of “you cannot sell what you do not have”—or some variation of that saying—became a near existential problem for many manufacturing and construction firms beginning in 2020. Even today this situation remains a problem for some companies and industries. The data on construction material prices, new orders, and unfilled orders during both the Great Recession of 2007-2009 and since 2020 bear this truth out and much more.

Copper’s June spot price marked a 15-month low for the commodity and its lowest price since rebounding from its early COVID-19-induced nadir. Although the price of the commodity is still historically high, the directional movement of the price of copper has historically served at times as a useful harbinger of future manufacturing and construction materials prices. Twice since 2008 has the price of copper fell just before an overall decline in general construction material prices.

Yesterday’s 2nd Quarter 2022 advanced gross domestic product headline reading of a 0.9% contraction was not anticipated by all; however, this may have been in part due to the uneven performance of the economy by sector.

ConstructConnect’s Expansion Index, a monthly measure of the dollar value of construction projects in planning compared to the same month one year ago, registered 14% overall expansion in Canada and over 10% for the United States for the month of June 2022.

According to CME Group, an American global markets company and exchange operator, and The Wall Street Journal, CME Group will be introducing a new futures contract using ticker “LBR” starting as early as August 2022. This could be a significant benefit to smaller sawmills along with general and trades contractors involved in housing construction. Among the primary reasons are:

Earlier this month Amazon canceled or delayed the construction of over a dozen new warehouse structures. This news comes not long after the company posted its first quarterly pre-tax income loss since 2014; however, this was in part a result of the company’s acquisition of MGM Studios in early 2022. Excluding the acquisition, income from continuing operations was reported for Q1 2022 at $-3.84 billion.

The latest data on construction materials and supplies suggest no stop to the supply chain and manufacturing challenges facing the construction industry. Unfilled orders, new orders, and total inventories all reached historic highs in current dollar prices in the latest data reported for April 2022.