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Numbers Upwards, Trends Sideways - Markets rebounding with caution

Written By Peter Lucking On 13-Apr-2016

DENVER, CO, APRIL 13 - Vermeulens market reports are based on actual selling prices in the Institutional – Commercial-Industrial construction industry. Forecasts are based on leading indicators and historical comparative analysis.

The end of quantitative easing has reduced financial asset prices. Monetary authorities are looking towards continued growth and productivity increases to substantiate and absorb the eased money supply. There is money to spend.

Non-Residential construction spending has rebounded nearly 47% from its bottom. 2015 yielded an overall volumegrowth of 21%.

CONSTRUCTION DOLLAR VOLUME is the number one driver of construction prices. As volumes increase and contractor bidding opportunities and backlogs grow, the margins included in a bid will grow.

Residential dollar volume has recovered and is currently 86% higher than its bottom in July 2011. Existing home inventories have remained at 5.2months. Eased credit conditions for first time buyers, low vacancy rates, long-term employment, and income growth will increase household formation.

Non-Residential construction spending has rebounded nearly 47% from its bottom. 2015 yielded a volume growth of 24%. Infrastructure spending continues to be stable. New fiscal policy will be an important driver in this sector.

Concern exists about the trend of the market moving sideways. The Dow is reacting to some of the current events that impact the construction industry. The slowdown in China, for example, raises issues about the impacts on the construction industry as a whole in this country. Economic challenges in Europe also play a big part in world trends.

When the GDP moves from 2.1 to 1.9 in the U.S, slowdowns occur. What we are seeing is a general unease tied in part to upcoming elections. For example, the idea of isolationism has profound implications for globalbusiness interests. We are in a global economy. The repercussions of political situations can be very serious on business operations.

VERMEULENS.COM

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