Vermeulens Releases Q3-2020 Market Outlook

Published 11-9-2020

Vermeulens has released its market outlook report for the third quarter of 2020. Key points include:

  • Construction prices have been flat through Q2 and Q3 of 2020, with one in ten projects showing cost reductions with strong contractor coverage across the board.
  • Fed Watch: The Federal Reserve continued monetary stimulus.
  • Architectural billings continued to decline through Q3, while providing encouraging signs for recovery near the end of 2020. Both August and September have shown a net increase in inquiries.
  • Construction dollar volume continued its steady rise back to Q1 levels, led by residential construction volume which has fully recovered.
  • Construction job growth: Approximately 122,000 construction jobs were added this quarter, or 1.7 percent. Construction employment is still down 5.2 percent since its Q1 highs.
  • New York Stock Exchange: The stock market grew by 6.8 percent in Q3. The NYSE is still approximately 9 percent off of its Q1 highs, but has recovered back to 2019 levels.
  • Growth in employment: Monthly average job growth through Q3 was 1.3 million. Recovery continues at a slow pace, indicated by the six-month rolling average which is now at -1.5 million.
  • Gross Domestic Product: Initial GDP projections point to an annualized growth rate of 20.3 percent for Q3 2020; this is a sharp reversal of the 37.9 percent drop in Q2. 
  • Commodities: COVID-19 projections, residential construction spikes, and natural disasters have created short-term price spikes in both PVC (30 percent) and lumber (100 percent).
  • Consumer Price Index: Q3 CPI has recovered and is at +1.32 percent year over year (September 2019/September 2020).

The complete Market Outlook – Q3 2020 report is available from Vermeulens

Related Organizations
Construction Cost Consultant and Market Analyst