Construction Industry Forecasts

Below are 10 Economic Nuggets, “ripped” from the latest data releases and media headlines:

1) U.S. jobs growth in April was only so-so at +115,000. A figure nearer +200,000 is needed at this stage of the recovery. But there was good news about March. It was revised up from a previously reported +120,000 to a new figure of +154,000.

2) Initial jobless claims in the latest week were 367,000. For three weeks in April, they rose back to nearly 400,000, causing concern that the labor market might be stagnating again. The return to a lower number in the past two weeks is a strong positive indicator.

3) In Canada, April was the second consecutive month of strong employment growth, +58,000 on top of +83,000 in March. Better job prospects have caused more people to return to the labor market, raising the nation’s unemployment rate. 

4) Greater convergence is occurring between the U.S. unemployment rate, which fell one percentage point to 8.1% in April, and the Canadian rate, up from 7.2% to 7.3%.

5) The unemployment rate in the U.S. construction sector in April was 14.5%, down from 17.8% in the same month of last year. However, the year-over-year growth in construction jobs was a still lackluster +1.1%.

6) Year-over-year employment in engineering and architectural design services was a more upbeat +2.8%. Work in this sector is “out front” (i.e., a leading indicator) with respect to on-site construction work.

7) U.S. manufacturing employment in April was +2.0%. This is a remarkable turnaround. From 2000 to 2009, production line work did nothing but decline year over year. Since the beginning of 2010, half a million net new jobs have been created in manufacturing.

8) Canada’s housing starts in April were a stunningly high 245,000 units seasonally adjusted and annualized. Few analysts were expecting 200,000 units to be exceeded this year. The strength is all occurring in condominiums, particularly in Toronto and Vancouver.

9) Stock markets and further growth prospects are being sidetracked by the politics in Europe. In both France and Greece, electorates have shown they want less austerity and more stimulus. Greece continues to have trouble forming a coalition government. Another vote may be required and speculation grows about Athens leaving the Euro.

10) Uncertainty in Financial markets has been heightened by the $2 billion (and rising) trading error made by JPMorgan Chase bank. The irony of the timing – with CEO Jamie Dimon strongly opposed to regulation – has not been lost on commentators and officials.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.