Vermeulens’ Market Reports are based on actual bid prices in the Institutional-Commercial-Industrial Construction Industry. Forecasts are based on leading indicators and historical comparative analysis.
Construction Prices: Prices remained flat in Q1 while in March about one third of contractors had full backlogs compared to the previous year. Currently, backlogs in the Northeast are slightly higher than a year ago, while the country is slightly down due to weakness in the South and West.
Fed Watch: The Federal Reserve continued monetary stimulus in line with the “new normal”. The size of this stimulus is substantial and we expect construction sector escalation to be well above long term averages in the medium term.
Architectural Billings: Q1 has returned to growth in inquiries; however, three quarters of billing declines in 2020 does indicate a lower construction volume for the second half of 2021.
Construction Dollar Volume: Residential construction continues to boom reaching new highs in Q1; non-residential construction is down 7.4%, while infrastructure spending is up by 1%.
Construction Job Growth: Approximately 66,000 construction jobs were added in Q1, or 0.8%; construction employment is still down 2.0% since pre-pandemic levels.
New York Stock Exchange: The stock market grew by 7% in Q1, and has completely recovered reaching new highs in Q1; overall the NYSE is up 51% from March 2020.
Growth in Employment: Monthly average job growth through Q1 was 0.54M as the economic recovery begins to accelerate.
Gross Domestic Product: Initial GDP projections point to an annualized growth rate of 4.50% for Q1 2021
Commodities: Although construction price inputs have grown by 12% overall, bid prices remain flat as contractors absorb the increases through reduced margins. Covid 19 projections, a declining USD, residential construction spikes, and natural disasters have created short term price spikes in both PVC (30%) and lumber (100%); steel continues to climb in particular for non standard shapes.
Personal Consumption Expenditures (PCE) : PCE has nearly fully recovered; rising back up to 1.41% year over year.
Previously Published Market Outlook Quarterly Reports