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Only the Dakotas and Vermont have an expanding economy in the three months ending in September. These small states were impacted very lightly by the housing, mortgage and manufacturing recessions. They are not leading the country out of recession. They simply avoided most of the recession.
This chart shows the ranking of states by recent economic performance, including data on the last three months (annualized – September) and changes in economic activity for the latest three months (annualized) versus the previous year.
Although the construction equipment market remains very depressed activity perked up in September. Orders from US factories jumped nearly 50% to the highest level in a year. Shipments increased 4% and factory inventory fell marginally. The pickup is in domestic sales since imports fell much more sharply than exports. However, prices continued to slide lower in a weak market with excess inventory.
The initial surge in the single family market is now ebbing with the expiration of the $8,000 down payment subsidy but the housing recovery will be sustained at a slow pace until it gets another boost from a renewed tax credit — possibly within days — or the end of monthly job losses during the winter.
The small September rise in heavy construction spending interrupts an 8-10 month cutback period in this market with the decline in spending reaching 3-4% by next spring, about 5-7% after adjusting for rising project costs. Private facility investment has recently begun to decline under stress from reduced capacity needs during the recession. This decline will accelerate over the next year, especially for power projects where starts have dropped by nearly half.
Jobsite spending on nonresidential building construction fell 1.6% in September. The decline is not balanced. Spending for commercial buildings has fallen 34%% since the peak in early 2008. Most of the deep decline in this market is now over. Spending for institutional buildings has dropped 3%% since the peak earlier this year.
Construction spending rose 0.8% in September entirely due to an implausible jump in residential remodeling which is unlikely to be sustained and could be revised away as was a similar jump earlier this year. Residential remodeling indicators all suggest that this market is continuing to slip lower.
Accompanying this report are tables and charts based on RSMeans’ measures of dollar-per-square-foot construction costs. The results for 25 major cities are shown for four care and shelter types of structure. It is most expensive to build a two- to three-story hospital. A little less expensive on a dollar-per-square-foot basis is a four- to eight-story hospital. Stepping down by about one-quarter is an eight- to 24-story apartment building. Cheapest to construct, at just about half the expense of a low-rise hospital, is a nursing home. This story also presents a number of key city cost comparisons.
During the current turning point, a splintering is taking place between the consuming and business sectors of the economy. Many firms are experiencing a turnaround in their financial fortunes due to downsizings, layoffs and other cost cutting. This has helped them with profitability. The stock markets have been reacting accordingly, with solid index increases. But the gains in business productivity and profitability are being achieved at the expense of job losses. It is this very effect that is causing consumer confidence to remain low.
When cool roof products were first introduced, there was a great deal of enthusiasm in the industry in regard to the products’ potential, particularly in terms of energy savings for the consumer. Over the last five years, the metal building and roofing industry has continued to invest in research and development of more environmentally friendly manufacturing processes. With innovative products and systems, such as cool metal roofing colors, the metal building and roofing industry has made significant strides in providing sustainable roofing products that offer lower energy costs with less of an impact on the environment.
