Vermeulens has released its market outlook report for the third quarter of 2017. Key points include:
- Construction Price escalation nationally is trending to 4% per annum for Q3 2017.
- Construction Cost Trendline: Due to consistent increases in construction costs over the past few years, Vermeulens Index long term trendline is up from 3.3% to 3.4%.
- Energy and commodity prices have declined lately, offsetting the spike in metals and leaving the Dow Jones Commodities Index relatively flat.
- Consumer Price Index: After a flat first half of 2017, CPI is trending back to expected long term averages at 2.5%. Construction Dollar Volume has increased by 4.7% year over year (Sept 17-Sept 16). Year over year growth can be attributed to residential and infrastructure spending. Non-residential spending has declined 1.3% year over year.
- New York Stock Exchange: The stock market remains at all-time highs, with Q3 seeing the NYSE break the 12,000 range for the first time and yielding a 4% increase in equities.
- Growth in Employment: Monthly rolling average job growth at the end of Q3 sits at 154,000 jobs, showing a continuation of the downward shift from the 249,000 average seen in the second half of 2014. This quarter’s drop was mostly attributed to the 18,000 jobs added in September and likely impacted by the hurricanes.
- Construction Job Growth: We are at full employment in the construction sector. The first three quarters of 2017 have added 102,000 construction jobs nation-wide or 1.5%. Wage and profit increases in the sector will continue to draw employment from new entrants and other sectors.
- Gross Domestic Product exceeded expectations and increased by 3% this quarter.
The complete Market Outlook – Q3 2017 report is available from Vermeulens.