Construction Economic News

The Construction Economics Brief, produced by ConstructConnect’s economics team, is a monthly video series whose aim is to provide the latest and most pertinent economic information to construction industry leaders in a concise video format.

Try thinking like a central banker. Your main goal at the moment is to bring down inflation to around +2.0% year over year. Your primary weapon to achieve that end is high interest rates. They’ll slow consumer spending and housing starts but will also cause collateral damage in labor markets. Signs of kinks in job creation will be greeted with a smile.

Challenging economic conditions in China will have ramifications for U.S. prices, and certainly within the construction industry. In its latest GDP data release, China’s economy grew at an annualized rate of 6.3%, marking one of the slowest pre-COVID-19 growth readings since at least the 1990s.

As my colleague, Michael Guckes is wont to say, every economic cycle is different. The study of ‘the dismal science’ (as economics has sometimes been labeled) in school lecture halls pretends otherwise.

On July 26, the Federal Reserve increased the benchmark Fed Funds Rate (FFR) to 5.25%, marking the 11th consecutive time that the Fed has raised rates since early 2022. Never in history has the Fed raised the FFR this aggressively. As the Fed increases the FFR, it indirectly raises the cost of borrowing for public and private borrowers. This benchmark, which influences the rate of all other U.S. debt products, is presently at its highest level in more than 22 years.

The Construction Economics Brief, produced by ConstructConnect’s economics team, is a monthly video series whose aim is to provide the latest and most pertinent economic information to construction industry leaders in a concise video format.

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 June 2023.

A New Milestone for Megas ConstructConnect announced today that June 2023’s volume of construction starts, excluding residential work, was $63.2 billion, an increase of +25.5% versus May 2023’s figure of $50.3 billion (originally reported as $49.2 billion).

U.S. consumer prices increased by 3.0% in the year period ending June 30, 2023, according to the Bureau of Labor Statistics. This marked the slowest recorded rate of inflation in over two years. At that time, prices were only just beginning their historic rise caused by a combination of surging demand, crippled supply chains, and hampered production.