This is a post from Alex Carrick's blog that covers the Canadian construction industry.

Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

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Construction Industry Forecasts

Notes from Alex Carrick - Sep 14, 2012

Alex Carrick
Latest Economic Nuggets: Mid-September 2012

The following are Economic Nuggets “ripped” from the latest data releases and media headlines.

  1. A proper assessment of the economic outlook is largely on hold until the U.S. Presidential election is decided in November. The Republicans and Democrats are far apart in the approaches they would take to economic policy.
  2. The U.S. added 96,000 net new jobs in August. That was an okay figure, but it wasn’t outstanding. The latest initial jobless claims level was also disappointing at 382,000. A more desirable number for first-time unemployment insurance seekers would be in the range of 350,000 to 370,000.
  3. Nevertheless, the U.S. unemployment rate in August did decline slightly from 8.3% to 8.1%, although the primary reason was because the size of the labor force fell.
  4. There is good news in the labor market. In the services sector, which accounts for 70% of all jobs, employment has returned to about where it was before the recession.
  5. In two major sub-sectors – leisure and hospitality and business and professional services (which includes temporary help agencies), the number of jobs is now even with or above pre-recession levels.
  6. In two other major sub-sectors, information services and construction (unfortunately), employment remains seriously depressed and flat.
  7. On September 13th, the Federal Reserve took another bold step to move the economy forward. It will purchase $40 billion in mortgage-backed debt a month and keep interest rates near zero percent until mid-2015 rather than mid-2014. No limits will be placed on the amount of money to be spent in what is essentially a QE3 (crank up the printing presses) program. Mr. Bernanke seems determined to do whatever is necessary to lower the jobless rate. Stock markets are sure to respond favorably. employment may lie in a housing sector that is beginning to show improvement. Permits, starts and prices have all been trending mildly upward since the start of summer.
  8. Canada added 34,000 jobs in August, which sounds more impressive than it actually was. The +34,000 figure almost exactly matched the -31,000 result the month before. The swing in both months came in part-time employment.
  9. Canadian housing starts continue to be remarkably strong. In August, they were 224,000 units seasonally adjusted and annualized. They’ve been above 200,000 units in 12 of the past 14 months. Almost everyone believes they’re ready for a downturn.
  10. Toronto home starts through August were 33,000 units. A straight-line projection would yield an annual figure of 50,000. That would set a new record for Canada’s largest urban centre. The previous peak was 46,500 units in 1987.
  11. And this just in: On September 13th, the Federal Reserve took another bold step to move the economy forward. It will purchase $40 billion in mortgage-backed debt a month and keep interest rates near zero percent until mid-2015 rather than mid-2014. No limits will be placed on the amount of money to be spent in what is essentially a QE3 (crank up the printing presses) program. Mr. Bernanke seems determined to do whatever is necessary to lower the jobless rate. Stock markets are sure to respond favorably.

Alex Carrick

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


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Read Other Recent Alex Carrick Posts

10/12 - Latest Economic Nuggets: Mid-October 2012
10/04 - Auto Sales Set a Blistering Pace in the U.S. and Canada
09/18 - Canada’s Energy Future is Assured, Right? Think Again
09/06 - Auto Sector Labor Relations will Play a Role in Construction Outlook
08/30 - Raucous Behavior in the Party Room Next Door
08/13 - Latest Economic Nuggets: Mid-August 2012
07/31 - Canada’s GDP Advanced a Timid 0.1% in May but Support Will Come from Better U.S. Home Prices
07/19 - Finding the Pearls in the Latest U.S. and Canadian Economic News
07/13 - Latest Economic Nuggets: Mid-July 2012
07/04 - U.S. Auto Sales Continue Bullish While Canadian Incomes Languish
06/28 - Three Pivot Points for the World Economy - U.S. Housing, Europe’s Conundrum and Oil Prices
06/14 - Economic Nuggets – June 15, 2012
06/06 - Canada’s First Quarter GDP Growth Met Expectations, But What Comes Next?
05/30 - Ontario has a Backbone of Strength for the Decade Ahead
05/14 - Economic Nuggets - May 15, 2012
05/11 - Canada Rode a Second Consecutive Month of Strong Job Gains in April
05/04 - U.S. Employment Rose by a Mediocre 115,000 in April
04/27 - U.S. GDP +2.2% in Q1 2012 and Alberta led Canadian Provinces in 2011
04/18 - U.S. Inflation Low in March; Canada’s Central Bank Looking to Raise Rates
04/12 - Canada’s Trade Surplus in February Declined but Business is Optimistic

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