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Mann at Work

Reed Construction Data editor Denise Mann gathers North American construction-related economic announcements from around the Web and summarizes them just for BuildingTeam Forecast readers. Your feedback and suggestions for future topics to be covered are always welcome.

Friday, May 11, 2007

An Up and Down Week for the Economy

May 11 2007 12:16PM | Permalink | Email this | Comments (1) |
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It’s been a busy week for construction-related market statistics and economic news. Here’s a quick summary.

  • U.S. advance retail sales declined slightly;
  • The Canadian unemployment rate remained steady;
  • Canadian housing starts dropped;
  • The Fed held the benchmark interest rate steady;
  • Prices of new homes in Canada rose slightly in March; and
  • Canada and the U.S. reported their international trade numbers for March;

Elsewhere on BuildingTeamForecast, Jim Haughey writes that the year-to-date value of construction starts through April 2007, excluding residential contracts, totaled $97.355 billion, 21.7% higher than in 2006.

Advance retail sales figures decline in April
The U.S. Census Bureau says that advance estimates of U.S. retail and food services sales for April* were $372.0 billion US, a decrease of 0.2% from March, but a 3.2% increase from April 2006. Total sales from February through April 2007 were up 3.7% from the same three-month period a year ago.
*adjusted for seasonal variation and holiday and trading-day differences, but not for price changes

Canadian unemployment rate remains at historic low
Estimates from Statistics Canada’s Labour Force Survey (LFS) showed little overall change in employment in April, following strong employment gains since September 2006. The unemployment rate remained at an historic 33-year low of 6.1% in April. Employment in the construction sector rose 0.6% from March to April and 4.4% year over year, April 2006 to April 2007.

Canadian housing starts slump in April
The seasonally adjusted annual rate of housing starts, as reported by the Canada Mortgage and Housing Corporation, was 211,900 units in April, down from 214,000 units in March. Actual starts, in rural and urban areas combined, were down an estimated 6.6% in the first four months of 2007, when compared to the same four-month period in 2006.

Actual single starts in urban areas were 14.5% lower than they were a year earlier, while actual urban multiple starts were down 4.7%. The CMHC attributes the larger decrease in single starts to a growing interest in less expensive multiple units.

Fed leaves benchmark interest rate at 5.25%
The U.S. Federal Reserve Board members met on Wednesday, May 9 and announced that they would leave the benchmark interest rate unchanged for the seventh straight time. In a statement explaining the reasons for the decision, the Fed acknowledged the recent sluggish growth, but continues to hold the opinion that the economy is like to expand at a moderate pace in the coming year.

Statistics Canada’s New Housing Price Index rises slightly
The cost of purchasing a new home in Canada rose 0.3% in March, when compared to the previous month. As a result, Statistics Canada’s New Housing Price Index rose to 149.3 (1997=100). Of the 21 metropolitan areas the agency surveyed, 16 showed increases. Saskatchewan was in the lead with a +10.5% increase in March. However, Edmonton is the overall leader, with a +39.8% increase over the past 12 months.

Canadian imports and exports set record highs
Canadian international merchandise trade showed robust improvement in the month of March. Some of the increase can be attributed to improved flow in the transportation of goods, after a disruption in rail traffic in February, according to Statistics Canada.

Canadian companies exported $40.6 billion CDN worth of merchandise goods in March, up 1.4% from the previous month. Imports were up 3.3% in March, to reach a record high of $35.9 billion.

U.S. exports climb $2.2 billion U.S. in March
The U.S. Bureau of Economic Analysis announced that March exports were $126.2 billion US in March, up from $124 billion in February. Imports were also up, from $181.9 billion in February to $190.1 billion in March.

The total goods and services deficit for March stood at $63.9 billion, up from $57.9 billion in February. Year over year, the goods and services deficit was up $1.6 billion from March 2006.

The February to March change in exports of goods reflects increases in automotive vehicles, parts and engines; industrial supplies and materials; and consumer goods. The same three sectors also saw increases in imports of goods.

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