Construction Analytics: A blog that takes readers far deeper than the survey headlines

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ed zarenski construction analytics
Ed Zarenski's Construction Analytics blog

Ed Zarenski‘s blog: Construction Analytics: Economics Beyond the Headlines takes a serious look behind the curtain at construction market and price surveys and data.

This isn’t light reading, and certainly isn’t superficial. Yet the writing is clear and certainly relevant to anyone who is trying to make business decisions based on construction industry data, the sort collected by government agencies, publishers and private services such as Dodge and ENR.

Zarenski boils these observations down to produce his own construction market analysis; so if you are looking for a projection for the current year, see the 2019 Construction Economic Forecast – Summary – Dec 2018.

Here’s another recent post: Construction Starts is a Survey Sample – How Big is the Sample?

Zarenski poses a key question to anyone reading the Dodge construction starts survey; observing that the sample size (and percentage of the sample that is surveyed) can truly skewer the results.

For a survey sample to be used to compare to itself from year to year to predict growth in spending, sample size must remain constant from year to year. If it is not constant, the apparent growth in starts does not reflect real growth in spending.

It is impossible within the year to verify if sample size is constant with previous year sample size. The sample period is a year of new starts. To find out if the sample size is consistent, the sample must be compared to actual spending from starts from that period. Starts from any given year get spent over a period of the next 2 to 4 years. An average spending pattern from starts for any given year is 20% of the revenue gets spent in the year started, 50% in the next year and 30% in the 3rd and 4th year. It takes several years to see the pattern of starts sample size versus actual spending.

If starts survey sample size varies from year to year, it’s possible some of the spending growth anticipated from new starts may not represent growth in real volume of future work but could simply represent a change in sample size. Potential significant variations in sample size are seen in the data and may cause errors in the forecast. Here are some examples.

Overall, this site and blog will be especially helpful for industry leaders and planners seeking to understand where things are headed.  It is a worthy entry in the 2019 Best Construction Blog competition.

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