Construction Economic News

Megaprojects Seized the Spotlight Again ConstructConnect announced today that July 2022’s volume of construction starts, excluding residential work, was $53.7 billion, an increase of +12.2% compared with June’s figure of $47.9 billion (originally reported as $47.5 billion).

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.

Changes are happening quickly with respect to costs and prices in the economy. This article, in tables and graphs, sets out the latest Producer Price Index results published by the Bureau of Labor Statistics.

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.

It’ll be hard for anyone to find much fault with July’s Employment Situation report from the Bureau of Labor Statistics. The total number of jobs gained during the month was +528,000, which beat the previous six-month average of +461,000. Interestingly, it was just about a match for January-to-June 2021’s average of +533,000.

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.

U.S. real, i.e., inflation-adjusted, gross domestic product contracted by -0.9% in the second quarter of this year, on the heels of a -1.6% slide in the first quarter. (By way of contrast, Q4 2021 pulled ahead by +6.9%).

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.