Vermeulens has released its market outlook report for the third quarter of 2019. Key points include:
- Construction price escalation nationally has trended to 4 percent per annum for Q3 2019.
- Fed Watch: The Federal Reserve continued monetary stimulus.
- Construction cost trendline: Due to consistent increases in construction costs over the past few years, Vermeulens Index long term trendline is up to 3.5 percent.
- Architectural billings have continued to see declines in recent months, however inquiries and contracts have shown recent growth.
- Construction dollar volume has held over the past few months and is +0.45% year over year (Sep 18/Sep 19).
- Construction job growth: We are at full employment in the construction sector, however, growth has slowed compared to previous years. Q3 has seen the addition of 15,000 construction jobs (0.20%) nationwide.
- New York Stock Exchange: The stock market dropped by over 5 percent in August and recovered fully by the end of the quarter (-0.45% Q2-Q3)
- Growth in employment: Monthly average job growth through Q2 was 188,000. The six-month rolling average is still down at 170,000 and has not yet recovered from the drop in May.
- Gross Domestic Product: GDP maintained a strong annualized growth rate of 2.3 percent through Q3 2019. Long term expectations have fallen slightly.
- Commodities: Steel price level changed from $877 (2019 Q2) to $761 (2019 Q3). US steel import tariffs of 25 percent were lifted in May 2019. Oil prices changed from $58.47 (2019 Q2) to $54.07 (2019 Q3), fluctuating between a high of $62.9 and a low of $51.09.
- Consumer Price Index: Q2 CPI rose slightly which resulted in the annual inflation rate remaining steady at 1.9 percent (2019 Q2 to 2019 Q3).
The complete Market Outlook – Q2 2019 report is available from Vermeulens.