Blog – Construction Spending Analysis and Commentary – June 2023
Summary:
Details on Private and Public Construction Spending
Private construction spending was at a seasonally adjusted annual rate of $1,500.7 billion, an increase of 1.3 percent from the revised March estimate of $1,481.6 billion.
Within private construction, residential construction stood at an annual rate of $845.4 billion in April, marking a slight increase of 0.5 percent from the revised March estimate of $841.6 billion.
Nonresidential construction spending within the private sector was at an annual rate of $655.3 billion in April, an increase of 2.4 percent from the revised March estimate of $640.0 billion.
Public construction spending was estimated at a seasonally adjusted annual rate of $407.7 billion in April, up by 1.1 percent from the revised March estimate of $403.4 billion.
Within public construction, educational construction saw a minor decrease of 0.1 percent to an annual rate of $88.3 billion, compared to the revised March estimate of $88.4 billion.
Highway construction, also within the public sector, was at an annual rate of $124.7 billion in April, marking an increase of 1.3 percent from the revised March estimate of $123.1 billion.
There has been a lot of chatter about the lack of supply in the private housing market. With many homeowners locked in at much lower rates than the current near 7% level, the amount of existing homes on the market is still well below normal levels. New construction is more risky and takes time. Nevertheless, it is needed to get inventory levels back to more normal levels.
Source - https://www.forexlive.com/news/us-construction-spending-for-april-12-versus-a-02-expected-20230601/
Additional sources and links:
Construction costs - Falling material prices expected to reverse course | Construction Dive
Infrastructure - https://e.vnexpress.net/news/business/growth-outlook-for-logistics-transportation-remains-robust-vinacapital-4612805.html
ESG and Sustainability Reporting - https://www.martincurrie.com/canada/insights/moving-beyond-esg-stewardship,-sustainability-and-impact
Solar - https://www.technologyreview.com/2023/06/01/1073799/the-world-is-finally-spending-more-on-solar-than-oil-production/
Climate Change Mitigation - https://spice-spotlight.scot/2023/06/01/net-zero-what-does-it-mean-and-what-happens-afterwards/
Insurance Risks - https://www.nationalobserver.com/2023/06/02/news/insurance-giant-wont-sell-new-home-policies-california-over-wildfire-risks
Geospatial - https://www.geospatialworld.net/prime/business-and-industry-trends/geospatial-technology-sustainable-future-insights-and-innovations/
Technology - https://radixweb.com/blog/top-technology-trends
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Construction Spending and Outlook - The USA and the World - June 2023 - Analysis and Commentary.pptx
1. INFRASTRUCTURE AND
CONSTRUCTION
SPENDING – THE USA AND
THE WORLD
Paul Young CPA CGA
Senior Pre-Sales/Business Development/Customer
Success Management Consultant
June 2, 2023
2. PAUL YOUNG - BIO
• CPA, CGA (1996)
• Academia (PF1, FA4, FN2, MU1. and MS2)
• SME – Customer Success Management
• SME – ESG and Sustainability Reporting
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Macro/Micro Indicators
• SME – Supply Chain Management
• SME – Data, AI, Security, and Platform
• SME – Internal Controls and Auditing
Contact information email: paul.young_cga@outlook.com
LinkedIn: https://www.linkedin.com/in/paul-young-055632b/
3. AGENDA
• Infrastructure
• Construction Spending - USA
• Permits – Canada
• Infrastructure gap
• Supply chain issues
• Monitoring assets and risk mitigation
• Residential financial statements
• Construction company financial statements
• Summary
PRESENTATION TITLE 2/11/20XX 3
4. WE FORUM / FOCUS OF INFRASTRUCTURE
Source - https://www.weforum.org/agenda/2021/01/four-big-infrastructure-trends-for-2021/
PRESENTATION TITLE 2/11/20XX 4
5. GLOBAL INFRASTRUCTURE – ROAD
INFRASTRUCTURE
PRESENTATION TITLE 2/11/20XX 5
Source - https://www.nationmaster.com/nmx/ranking/road-infrastructure-spending
6. WORLD
INFRASTRUCTU
RE SPENDING
• Source -
https://documents.worldbank.org/
en/publication/documents-
reports/documentdetail/97057154
9037261080/hitting-the-trillion-
mark-a-look-at-how-much-
countries-are-spending-on-
infrastructure or
https://www.weforum.org/agenda/
2019/04/infrastructure-gap-heres-
how-to-solve-it/
PRESENTATION TITLE 2/11/20XX 6
8. CHINA AND GLOBAL INFRASTRUCTURE
• China continues to build and finance infrastructure projects in Africa - http://www.sais-cari.org/data-
chinese-contracts-in-africa
• China and the Belt Road - https://www.constructionglobal.com/construction-projects/china-belt-and-road-
initiative-spending-hit-pandemic
• China and developing countries / loans - https://www.reuters.com/article/us-china-emerging-
debt/database-reveals-secrets-of-chinas-loans-to-developing-nations-says-study-idUSKBN2BN0EY
• China and supply chain - https://www.arabnews.com/node/1418636/business-economy
• NATO and China’s control of transportation routes -
https://www.defensenews.com/global/europe/2021/03/04/nato-grapples-with-grasping-chinas-
transportation-clout-in-europe/
PRESENTATION TITLE 2/11/20XX 8
10. INFRASTRUCTURE GAP / UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 10
11. BUILDING PERMITS/ UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 11
12. BUILDING PERMITS/ UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 12
13. BUILDING PERMITS/ UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 13
14. BUILDING PERMITS/ UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 14
15. BUILDING PERMITS/ UNITED STATES
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 15
16. BUILDING PERMITS/ CANADA
Source - https://www.mckinsey.com/business-functions/operations/our-insights/reimagining-infrastructure-in-the-united-states-how-to-build-
better#
PRESENTATION TITLE 2/11/20XX 16
17. STATE AND LOCAL GOVERNMENT
INFRASTRUCTURE
Source - https://www.pgpf.org/blog/2020/06/state-and-local-infrastructure-spending-a-closer-look
PRESENTATION TITLE 2/11/20XX 17
18. SUPPLY CHAIN
PRESENTATION TITLE 2/11/20XX 18
Blog – How best to manage your supply chain.
1. Large container ships and emissions - https://www.bloombergquint.com/gadfly/huge-container-ships-biggest-problem-is-emissions
2. Port productivity - https://www.joc.com/port-news/us-ports/tpm21-one%E2%80%99s-nixon-says-us-port-productivity-gaps-mean-
congestion-months_20210302.html
3. Nearshoring - https://investmentmonitor.ai/manufacturing/think-nearshoring-will-bring-back-us-manufacturing-jobs-think-again/
Countries need to be more competitive with their policies in areas of taxation, environment, and other regulatory areas.
4. Data and AI will play a bigger role as part of supply chain management -
https://www.scmr.com/article/the_future_of_supply_chain_management_is_ai_and_data
5. Ability of canal systems to handle the flow of goods - https://www.agcs.allianz.com/news-and-insights/expert-risk-articles/suez-canal-
mega-ships.html
6. Moving supply chain areas from China to manufacturers as part of moving away from China influence - https://www.news-
press.com/story/opinion/2021/03/15/bring-critical-supply-chains-home-biden-china-mineral-markets/4692255001/
7. Standardized ESG reporting including rankings in areas like human rights or environment or other areas – Blog - 10 key ESG and
sustainability trends, ideas for both the Private and Public Sectors - https://www.linkedin.com/posts/paul-young-
055632b_10-key-esg-and-sustainability-trends-ideas-activity-7042799510351212545-
hwpI?utm_source=share&utm_medium=member_desktop
8. Development of new logistic projects like one belt road - https://fortune.com/2021/03/24/china-belt-road-initiative-soft-power/
9. Costs of moving freights - https://www.hellenicshippingnews.com/fbx-index-looking-forward-3/
10. Global inflation - https://www.bloomberg.com/news/articles/2021-03-11/inflation-is-already-creeping-into-some-corners-of-the-world
Here is my work on the supply chain - https://www.slideshare.net/paulyoungcga/how-to-better-manage-your-supply-chain
19. SUPPLY CHAIN RISKS
Here is my work on supply chain - Blog - Strengthening
Sustainable Supply Chains to Lower Emissions -
https://www.linkedin.com/pulse/blog-strengthening-
sustainable-supply-chains-lower-emissions-
young/?trackingId=0fMZE9C8TgCO8T5PLbIIjQ%3D%
3D
Supply Chain Disruption / Suez
The Suez Canal is the latest example of how both the public
and private sectors need to embrace crisis management
including having their crisis management report audited
every year.
https://www.slideshare.net/paulyoungcga/how-to-better-
manage-geopolitical-events
PRESENTATION TITLE 2/11/20XX 19
Source - https://supplychaingamechanger.com/top-10-
global-supply-chain-risks/
20. MONITORING OF INFRASTRUCTURE
ASSETS
PRESENTATION TITLE 2/11/20XX 20
Blog – How best to Identify Climate Risks with Portfolios - https://www.linkedin.com/pulse/blog-how-best-identify-climate-
risks-portfolios-paul-young/?published=t
More monitoring tools - https://community.ibm.com/community/user/communities/community-
home?CommunityKey=3d7261ae-48f7-481d-b675-a40eb407e0fd
Insurance Risk - https://www.thezebra.com/resources/car-insurance/auto-insurance-predictions-2022/
23. VEGETATION
MANAGEMENT
PRESENTATION TITLE 2/11/20XX 23
Blog - Safeguarding Assets through use of Weather Analytics and Vegetation Management Solutions - ESG and Climate
Change - https://www.linkedin.com/posts/paul-young-055632b_vegetation-
TQfV?utm_source=share&utm_medium=member_desktop
https://www.ibm.com/products/environmental-intelligence-suite/vegetation-management
This is a great opportunity for the utility sector to re-look at their asset management through using vegetation and
weather management solutions. Mitigation of risk from climate is becoming a key focus area for the utility sector.
https://www.slideshare.net/paulyoungcga/electricity-analysis-canada-and-the-oecd-february-2023pptx
26. ADDITIONAL LINKS
PRESENTATION TITLE 2/11/20XX 26
Blog – ESG and Sustainability Reporting – What is next – March 6, 2023 -
https://www.linkedin.com/pulse/what-next-esg-sustainability-reporting-paul-young
27. SUMMARY
• Higher material costs continue plague the construction sector
• Cities want more focus on fixing existing infrastructure including roads and bridges
• Addressing issues with water, land, and forest management as part of future urban and rural planning
• Risk and Crisis mitigation plans for wildfires, floods, and other climate events
• Optimization of public transit systems
• Addressing issues with ports, intermodal, warehousing, and other areas as part of addressing issues with the
supply chain
• Streamlining regulations related to development of Oil, LNG, Critical Metals, metals, lumber, cement, and other
products related to the construction sector.
PRESENTATION TITLE 2/11/20XX 27
Blog – Constructi on Spending Analysis and Commentary – June 2023
Summary:
Details on Private and Public Constructi on Spending
Private constructi on spending was at a seasonally adjusted annual rate of $1,500.7 billion, an increase of
1.3 percent from the revised March esti mate of $1,481.6 billion.
Within private construct
i on, residenti al construct
i on stood at an annual rate of $845.4 billion in April,
marking a slight increase of 0.5 percent from the revised March esti mate of $841.6 billion.
Nonresidenti al construct
i on spending within the private sector was at an annual rate of $655.3 billion in
April, an increase of 2.4 percent from the revised March esti mate of $640.0 billion.
Public construct
i on spending was esti mated at a seasonally adjusted annual rate of $407.7 billion in
April, up by 1.1 percent from the revised March esti mate of $403.4 billion.
Within public constructi on, educati onal construct
i on saw a minor decrease of 0.1 percent to an annual
rate of $88.3 billion, compared to the revised March esti mate of $88.4 billion.
Highway constructi on, also within the public sector
, was at an annual rate of $124.7 billion in April,
marking an increase of 1.3 percent from the revised March esti mate of $123.1 billion.
There has been a lot of chatter about the lack of supply in the private housing market. With many
homeowners locked in at much lower rates than the current near 7% level, the amount of existi ng
homes on the market is sti ll well below normal levels. New construct
i on is more risky and takes ti me.
Nevertheless, it is needed to get inventory levels back to more normal levels.
Source - https://www
.forexlive.com/news/us-constructi on-spending-for-april-12-versus-a-02-expected-
20230601/
Additi onal sources and links:
Construct
i on costs - Falling material prices expected to reverse course | Constructi on Dive