Construction Economic News

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.

ConstructConnect’s Expansion Index data through the end of June 2023 reported accelerating contemplated spending growth in the U.S. and Canada at the rate of 16% and 5%, respectively. Rising contemplated spending in the provinces of Alberta, Nova Scotia, and Ontario offset contracting results in Newfoundland and Quebec. Canada’s overall reading was slowed by a substantially lower reading for Quebec from the month prior.

ConstructConnect's Project Stress Index is a new resource that tracks changes in the level of projects that are delayed, placed on hold, or abandoned based on weekly construction activity data.

So far, minimally deterred by the Federal Reserve’s interest rate hikes, the unemployment rate in the United States has stayed near rock bottom. Seasonally adjusted (SA), it’s been less than 4.0% for 15 months in a row, indicative of a labor market that’s about as tight as it has ever been.

The recent history of global energy price movements is unprecedented. Not since at least World War II have energy firms, or their customers, experienced the severity and frequency of price shocks that have occurred as a result of COVID-19 and, more recently, the war in Ukraine.