12-2-16

Just a few important facts here (that you won’t read in the headlines).

1. Jobs have increased by 23% since the recession bottom January 2011. Construction spending has increased 52% in same period.
2. Adjusting jobs for hours worked and spending for inflation, both work output and constant volume construction grew at 28% since recession bottom.
3. Residential construction jobs are down 22% from the 2006 peak. In constant $ after inflation, real residential volume of work is down 39%.
4. Nonresidential buildings construction jobs are down 8% from the 2008 peak. In constant $ after inflation, real nonres bldgs volume of work is down 17%.
5. Construction spending average for the last 3 months is at a 10 year high. Construction volume in constant $ after inflation is still 18% below 10 years ago.
6. Census construction data is ALWAYS revised in the following two months after initial release. Census updates all the values for the previous year, usually with the May data release (on July 1) the following year.
7. In 2016, 7 times the first release of spending showed a decline vs the previous month. After revisions, the values show no declines vs the previous month.
8. In the last 36 months, there were 16 spending releases that originally showed a decline vs the previous month. After revisions there were no mo/mo declines.
9. It’s hard to add $100 billion in new construction spending in one year. Since 1993 it’s happened only 3 times; 2004, 2005 and 2015.
10. It’s real damn hard to add $100 billion in new construction volume in a year. After adjusting for inflation, construction volume has never increased by $100 billion. It has increased by $75 billion 4 times and 3 more times by $50 billion.
11. It takes about 6,000 jobs to put-in-place $1 billion of construction in a year. $100 billion in new work would require 600,000 new jobs in a year. The largest construction jobs growth ever recorded is about 700,000 jobs in 2 years.
12. Now think of #9, #10 and #11 in terms of ONLY the Infrastructure sector. Infrastructure, about 25% of total construction spending, added spending more than $25 billion in a single year only once. The average annual growth for the past 20 years is less than $10 billion/year. The average growth in jobs (excluding all recessionary years because they would make the result approach zero) is about 25,000/year.
13. The Aug-Sep-Oct 3mo average of construction starts for Nonresidential Bldgs (by Dodge Data) is the best 3mo since Q1 2008. Q1 2008 was the PEAK of the nonresidential buildings construction boom.
14. More infrastucture projects started construction in the 1st 6mo of 2015 than any time in history. This will boost infrastructure spending through 2017. Infrastructure spending is low in 2016 due to a low volume of starts in 2014.