National Economic Outlook - January 2016

National Economic Outlook - January 2016

Written By:
Ingo Winzer, President

Local Market Monitor

The real estate construction industry is fragmented and highly conservative. Local builders and their bankers don't increase or decrease the volume of their activity unless the reasons to do so are very strong. This makes sense because construction works best at an even pace, but it also means that the industry as a whole doesn't easily respond to changes in demand. Hence real estate cycles.

Overall, we are now at the stage of the cycle where not enough construction has taken place and builders are just gearing up for more. In the past year, jobs in residential construction increased 6 percent. This is a sure sign of higher demand, but also a sure sign that rents and home prices in many markets will be going up.

Total jobs in December were up 1.9 percent over last year. As in previous months, gains were small in the manufacturing sector. Jobs were up 1.7 percent in retail trade, 3.1 percent in business services, 3.2 percent in healthcare, and 3.4 percent at restaurants. Government employment was flat. Unemployment stayed at 5 percent.