2023's First Week in Review

Construction spending, job openings, jobs, and more

The first week of the year brings us new data on construction spending, labor shortages, the manufacturing industry, and more.

Monday

Gas Prices

Gas prices rebounded to $3.331 per gallon during the week ending January 2 but are still down about $1.60 over the past 6 months. That’s good. I drive a Mustang.

Tuesday

Construction Spending

Construction spending inched higher in November, up 0.2% from the previous month and 8.5% from November 2021. Residential spending fell 0.5%, which is no surprise at all given how high mortgage rates are at the moment. But I’ve also begun to spy some weakness in multifamily activity as well.

Nonresidential spending increased 0.9% for the month, which is a little surprising given elevated construction delivery costs and chatter regarding project postponements. Manufacturing-related construction spending increased 6.4% for the month, which comes out to $7.5 billion a year and is not surprising at all given the surge in chip manufacturing plants under development and a few recent prominent groundbreakings.

Conservation and development-related spending also saw a huge jump (up 14.6% in November). My thought is that that’s related to flood control projects.

As always, you can read more of my thoughts on this over at Associated Builders and Contractors.

Manufacturing PMIs

ISM and S&P Global both released their manufacturing purchasing managers’ indices this week. Both measures indicated the same thing: manufacturing activity contracted for a second consecutive month in December. This represents a pretty sharp reversal after 29 consecutive months of expanding manufacturing activity and is further reflection of the consumer shift back towards services. I expect demand for all kinds of things to wither over the months to come. That’s an element of the drift toward recession.

Wednesday

Job Opening and Labor Turnover Survey (JOLTS)