Construction Economic News

The collective revenues of the 14 largest U.S. publicly-traded firms in the nonresidential construction industry grew at a historic pace during the seven-quarter period between the end of 2020 and the third quarter of 2022, the latest quarter for which actual results are available. Total revenues during the period increased by nearly 50%, with the fastest growth occurring during the second half of 2022 as demand for construction surged.

ConstructConnect’s Expansion Index is a monthly measure of the dollar value of planned or contemplated construction projects compared to the same month one year ago. The Index geographically covers Canada, the United States, and their respective states and metropolitan statistical areas.

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.

In July 2022, the economics team at ConstructConnect reported that the CME Group, the holding company to the Chicago Mercantile Exchange, Chicago Board of Trade, and New York Mercantile Exchange, was soon to bring a new lumber contract product to market. This new product would enable the trading of lumber options in truckload, rather than railcar, quantities.

Given the increases in mortgage rates that have transpired, significant slides in homebuilding activity are being taken for granted in the United States and Canada. Based on the latest housing starts statistics, this is already underway and clearly apparent in the former more than in the latter. See Graph 8 below, where Canadian housing starts have been moving mostly sideways throughout this year, while U.S. starts have been exhibiting significant declines month to month.

Canada has become much more than a natural resource-based economy.

Megaprojects Take a Back Seat in November ConstructConnect announced today that November 2022’s volume of construction starts, excluding residential work, was $31.1 billion, a decline of -36.3% compared with October’s figure of $48.9 billion (originally reported as $47.5 billion; the difference coming mainly in the multi-unit residential subcategory of starts).

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

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

Much of the world may be taking a break as yearend approaches, but that doesn’t mean the economy is kicking back with eggnog and gingerbread cookies. Public and private sector data releases are pouring forth regardless, and here are some of the nuggets to be gleaned.