You don’t have to look far to find contradicting reports on the current and future state of construction. On their own, the numbers usually speak for themselves. Putting them together for a clear view of the industry and where it’s headed is the challenge.
This month, Reuters reported that construction spending in January was unexpectedly weak. A week later, the news agency reported that new Labor Department numbers showed a February increase in construction sector hiring, with approximately 48,000 employees added to national payrolls — nearly double the 25,000 added in January. The jump in hiring helped drive the national unemployment rate down to 7.7 percent, the Dow Jones Industrial Average up to record highs, and the S&P 500 upward for six consecutive days.
These figures seem to support the contention that construction is gaining momentum across the country, much of it attributed to the Northeast rebuilding after Hurricane Sandy.
Hopes of a recovery were dampened when the Commerce Department announced that the 2.1 percent drop in January was the largest decline in construction since July 2011 and marked a halt to nine months of consecutive gains. The decline was not anticipated by economists, who predicted a construction spending increase of .4 percent in January. Their expected rise, coupled with its actual decline, yielded a negative difference of 2.5 percent — a total that would indicate a downturn in aggregate construction spending and a reversal of any positive economic movement.
So what does it all mean?
Spending is down. Hiring is up. And the stock market is at an all-time high. Amidst fears of the Fiscal Cliff followed by the Sequester, to say our recovery has been turbulent would be a gross understatement. Sadly, there’s no definitive interpretation of these numbers. Significant jumps and dips are likely to continue. It’s important to take month-to-month changes in stride. As long as the numbers show measurable improvement over time, most economists and industry professionals are likely to remain positive.