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Construction Economics Update
Put-in-Place, Housing Starts, Small Business Optimism...

Construction Economics Update

Expansion Expected in Construction in Coming Year
The 2019 outlook released by the Associated Builders and Contractors foresees continued growth in the industry. Fueling that optimism is the number of total job openings in the U.S. (6.94 million), the low unemployment rate in construction (3.6%) and the record number posted by ABC'c Construction Backlog Indicator in the second quarter of 2018 (9.9 months).

"Sure, there has been a considerable volume of negativity regarding the propriety of tariffs, shifting immigration policy, etc.," says Anirban Basu, ABC's chief economist. "But the headline statistics make it clear that domestic economic performance is solid."

Construction Economics Update

Construction Outlays Posting Higher Totals
Though U.S. construction put in place dipped slightly month-to-month, it remains 5.1% higher year-to-date. The 0.1% decrease was due to single-family residential spending, which posted a 0.5% drop month-to month. Compared to the previous month, multifamily construction outlays improved 1.0% and total nonresidential construction added 0.1%. On a year-to-date basis, the value of nonresidential put in place is up 5.2%.

Construction Economics Update

Record Score for Small Business Optimism
The latest quarterly results from the Wells Fargo/Gallup Small Business Index, compiled post-election, tacked on 11 points to register a new all-time high of 129. According to the Wells Fargo Economics Group, business owners are upbeat about the overall environment and their personal financial situations, securing loans is not a great obstacle and interest rates are still not overly daunting. The one downside cited continues to be the tight labor market, which makes it "difficult for business owners to find and retain the workers they need."

Construction Economics Update

Total Housing Starts Continue to Improve
With a 3.2% monthly gain, thanks to a 22.4% jump in the multifamily sector, combined starts of single-family and multifamily residences are 5.1% better than the first 11 months of 2017. However, the single-family sector was actually down 4.6% month-to month. The latest monthly tally of residential permits was up 5.0% as both multifamily (14.8) and single-family (0.1%) showed growth.

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May 21, 2019, 4:37 pm PDT

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