Who We Are US Division Canada Division Product Information Management Partners Careers Advertising Opportunities Press Releases Reed In The News
Construction Project Leads BIM SmartBuilding Index Construction Costs (RSMeans) Market / Predictive Analytics Building Product Information Daily Commercial News Journal of Commerce B2B Marketing Construction Market Research
SmartBIM Market Insights Connections RSMeans SmartBuzz accessArchitecture Green Construction US Construction Canadian Construction
Search Project Leads Building Product Information Regional News & Info Building Codes Building Cost Models Project Library by Building Type eNewsletters Blogs Ask Our Experts Events
Upload Plans & Specs
RSMeans Bookstore Preorder 2010 Cost Data SmartProject News
home communities market insights notes from jim haughey even uglier economic reports coming soon

Even uglier economic reports coming soon

Insight and Analysis of Construction Industry Trends

Featured in:

Join the Discussion!

Jim Haughey avatar

The uniqueness of this recession is the panic about the eventual seriousness of the recession and temporary loss of credit access for many businesses in early September.  The panic was inevitable since the problem was neither anticipated by most nor well understood when it happened.  Everyone saw both Congress and the presidential candidates bewildered by the unexpected development and quite willing to defer to technical experts to find and implement a solution while they set about the important task of finding someone to blame.

This put enough spending, both investment and consumption, on hold to assure that October will be the weakest month in the economy since the post 9/11 period. Spending in the current quarter began at a level below the 3rd quarter average so GDP will drop in the 4th quarter as much a 4%. The downward momentum will bring another sizable, although smaller decline in the winter.

Private commercial construction will be one of the industries taking an outsized hit in the current quarter because it is so closely tied to financial markets.  Other industries with larger than average declines will be the motor vehicles and electronics industries.  The former has little reserve capacity left to absorb short term losses.  The latter is a very cyclical industry that tracks closer to the world economy than to the US economy.

The anticipated 4% GDP drop is an annualized growth rate.  It can occur if spending in November – the middle of the 4th quarter- is 1% below spending in August – the middle of the 3rd quarter. The jobs report for October already puts labor hour worked down 0.8% from August.  The retail sales report for October, excluding the decline in gasoline prices, show consumer spending on track to decline more than 1% from August to November. Ominously, hours worked on construction job sites are off 2.8% from August to October.

What will keep the 4% declining pace from continuing into next year?  Evidence that the credit fix is beginning to work will take the “hold” off some spending.  The economy began this recession with relatively lean inventories.  Dumping surplus inventories always accounts for most of the GDP decline during a recession via cuts in production jobs.  However, some panic selling of inventories is already underway.  Because commodity prices, especially oil and metals, were further above sustainable prices than usual at the onset of the recession, falling prices will cushion the decline in nominal consumer incomes. The ongoing price decline will be approximately large enough this quarter to offset the decline in spending that stems from the sharp recent drops in household assets, both housing and stocks.


Integrate Bid Opportunities with Your CRM and/or SFA

Seamlessly integrate relevant project news data with your own systems to centralize pipeline and sales lead management. How?

  • Establish searches in Reed Connect and repeatedly export data that matches your specific criteria
  • Export new projects or updates to projects that you have previously exported
  • Select individual projects for export and receive updates to those projects for as long as they are of interest
  • Exported projects include company information — who’s bidding and key participants
  • Links back to Reed Connect to access full Project Details, Company Details, Contact Details, and Plans & Specs

Learn More!

Member Comments

» View all comments (1 total comments)
11/19/2008 - posted by Grus Personnel

Temporary construction staffing allows contractors to save money by only hiring workers they need, in these tough economic times staying under budget is important to both contractor and skilled tradesmen. Past statistics have shown that when an economic recession occurs temporary construction workers are the first to go, but, when the tides starts to turn, even a little, temporary workers are the first to get hired back even before permanent workers.

As the United States economy tries to right itself, more commercial and industrial construction projects are starting to move beyond the planning stage and temporary construction workers …

Post Your Own Comments 
» Not a member? Register now to become one. Otherwise, login to post your comments on this article.

Related Information

Read Other Recent Jim Haughey Posts

» Back to Jim's Blog
   Community Login | Register

Search Site

Advanced Search


What's Hot

Take a Demo!


Recent News

E Newsletter

Do You Know?

Green items are now identified in almost all 2009 RSMeans publications. A new “Green Product” icon easily identifies unit cost line items that have been deemed green by the RSMeans Engineering staff.

Learn more!


Resource Center

© 2009 Reed Construction Data Inc. All rights reserved.