Sir,
I am ram working as a steel commodity analyst for Beroe Inc. At present I am working on U.S. construction industry segment. With your vast expertise, I kindly request you to provide an insight on how the construction industry segment is in CA.

Through May, construction starts in California are about even with the same period last year.  for the whole country, nonresidential construction starts are down 13% year to date.  But at the same time, california is losing construction jobs faster than the rest of the country. the intrepretation is that the construction recession began earlier in California and is ending a bit earlier. Again, at the same time, a large than usual share of started projects in California have been slowed or stopped accounting for the outsize drop in construction jobs in relation to projects started. Do not confuse California’s “worst in the country” state budget situation with trends in the state economy.  The California economy is doing about average among all state. Ahead, a big budget hit to public construction will likely delay and slow the recovery in the construction market relative to the rest of the country.

Thanks sir,
What about the construction material prices in this region especially for stainless steel are they expected to revive with the rise in stainless steel base price by many stainless steel majors, which is taking place off late.

Sir, I am observing an interesting phenomena in the housing market. The recent price collapse in the existing homes and the wave of foreclosures led to a situation when existing homes are 10%-15% cheaper than a comparable new construction home. And the new construction contractors cannot budge as their costs are higher than the price of a comparable existing unit. Something’s got to give in the longer term (say 1-3 years). What is it going to be? The cost of the land, construction materials, labor? I appreciate your thoughts.

Boris poses a critical question.  Massive foreclosures in the weakest housing markets have pushed existing home prices below equilibrium with new home prices even after homebuilders have trimmed features, wage rates and their own margins. This is temporary but it may persist for more than year more in the Southwest and Southeast and industrial Midwest.  This imbalance will be solved initialy by more reductions in the value of land. Homebuilders, unfortunately, typically own the land. Builders who buy land now or build on customers’ land will not have this problem. Eventually, balance will be restored by rising prices for existing homes when the amount of distressed prices homes declines enough.