The Preconomist

The May jobs report landed this week with a headline that sounds good with 172,000 jobs added. This marks the third consecutive month of positive payroll growth with upward revisions to March and April totaling 93,000 jobs. The unemployment rate held at 4.3 percent. By any standard read, that is a solid report. When you read the Employment Situation along with the JOLTS report, they tell a more complicated story and we need to look past the headline before drawing any conclusions. What did the report show for construction specifically? Construction employment was essentially flat in May. BLS characterized it as "little change over the month," the same language used for manufacturing, retail, and several other sectors. The sector has added 65,000 jobs since January, which sounds healthy, but the monthly pace has cooled considerably. January alone accounted for 45,000 of those gains. The spring hiring that typically accelerates the sector's seasonal recovery has been mu...

CPI dropped Tuesday with PPI following on Wednesday. One measures what consumers are paying and the other measures what it costs to produce. Together they tell you something the headlines missed. CPI hit 3.8 percent in April, the highest in three years, driven by the Iran energy shock. But that is the consumer story, the construction story lives in the PPI, and it is not primarily about energy. PPI data shows nonresidential construction material inputs up 6.6% year over year, but bid prices are only up 3.6%. What does that spread mean? It means contractors are absorbing costs they cannot fully pass through. Inputs measure what it costs to build, while bid prices measure what the market will pay to have something built. When inputs outrun bid prices by 300 basis points, someone is carrying that difference. In construction, that difference lands in contractor margins. It does not stay there indefinitely. The compressed margin eventually shows up as fewer bidders, shorter bid list...

The April employment report landed this week. Here is what the construction numbers tell us. The headline number was 115,000 jobs added across the economy in April. What happened in construction specifically? Construction employment showed little change in April on a month-over-month basis. This is notable since April is historically one of the strongest months of the year for construction hiring. Seasonal patterns push workers back onto sites as weather improves and project activity accelerates. A flat reading in April is not neutral, it is a miss relative to what the calendar normally delivers. The year-over-year picture adds context. Construction employment in April 2026 is 50,000 higher than it was in April 2025. That sounds reasonable until you compare it to where that number has been. In April 2024, the year-over-year gain was 215,000. In April 2025, it was 101,000. Over the last ten years the average is 243,400 when you exclude the spikes in 2020 and 2021. In April 2026, it is 5...

The Bureau of Economic Analysis released its advance estimate of first quarter 2026 GDP this week The headline number, 2.0% annualized real growth, will dominate the financial press. It represents a meaningful rebound from the fourth quarter's 0.5% reading, and on its face signals an economy that is holding together under considerable pressure. For most readers, that is the story. For owners, developers, and preconstruction professionals in the nonresidential construction market, the story is in a different table entirely. What drove the Q1 GDP print? The BEA attributed Q1 growth to increases in investment, exports, consumer spending, and government spending. The investment category carries the most weight for construction audiences, but the composition matters. Gains in equipment, led by computers and peripheral equipment reflecting the ongoing AI infrastructure buildout, and intellectual property products drove the investment contribution. Private inventory investment also added ...

What the ABI and DMI Are Actually Telling You The nonresidential construction market has two widely cited leading indicators. Both are released monthly. Both claim to forecast where building activity is headed roughly nine to twelve months out. In March, they appeared to diverge. One recovering toward neutral, the other pulling back from an elevated peak. Most readers see the headlines and move on. Few ask what these figures measure, or if the signals are as reliable as advertised. The Architecture Billings Index (ABI), published monthly by the American Institute of Architects and Deltek, is a diffusion index. It is based on a survey of architecture firms asking whether their billings increased, decreased, or held steady compared to the prior month. The result is a score centered on 50. Above 50 means more firms reported growth than decline. Below 50 means the opposite. Since the ABI measures direction, not dollars, inflation does not distort it. Its limitations are different. It is a ...

Metals, Construction Costs, and What the Data Actually Shows A year ago, the construction industry was running escalation scenarios and stress-testing contingencies against a tariff framework nobody fully understood. The numbers are in now. Some fears were overblown; some weren't. And a few risks that didn't make the original list are the ones that should be keeping us up at night heading into summer. What happened a year ago, and what's happened since? This wasn't a single tariff event. It was a fourteen-month escalation ladder. In February 2025, the Trump administration expanded Section 232 tariffs on steel and aluminum, eliminating most prior exemptions. By June 2025, rates had risen to 50% on core metal imports. In July 2025, copper was added at the same rate. Then, on April 2, 2026, the framework was restructured again: commodity metals stay at 50%, while derivative products tier down to 25% or 15% depending on metal content and country of origin. The policy is...

The Bureau of Economic Analysis (BEA) released its third and final estimate of fourth-quarter 2025 GDP on Thursday, and the Bureau of Labor Statistics (BLS) released the March 2026 Consumer Price Index (CPI) on Friday. Two numbers that moved markets and generated headlines. Neither one tells the full story on its own, and for construction owners trying to read the budget environment, the internals matter more than the headlines. Start with GDP. The number keeps changing. Why? The Q4 2025 GDP estimate has now been revised three times. The advance estimate in February came in at 1.4% annualized. The second estimate in March revised down to 0.7%. The third and final estimate released Thursday came in at 0.5%. That is a cumulative reduction of 0.9 percentage points across three releases. The reason the number keeps moving is structural. The advance estimate is published roughly a month after the quarter ends and relies heavily on incomplete source data and BEA assumptions. As Censu...