"We can't allow things that are inaccurate to stand." — The Word of Our Dan, February 19, 2008.

Friday, July 20, 2007

Whoa, Nelly

An interesting bit of boosterism from Chairman Dan in a Cliff Wells piece in today's Western Star:

“I think a good example is if you look at the Lafarge employees, they’ve come out with their heads up. They’ve accepted the fact that there’s a downturn in this industry. I think each and everyone of them realize with all the growth and economic opportunity that’s going on here right now, we have a boom here. We have an overheated construction industry here in this region right now, particularly in Corner Brook. I think they see a huge opportunity.”
Perhaps the construction industry overall, and particularly in Corner Brook, is “overheated”.

However, the residential construction industry, in the province as a whole, is not. This chart shows the 12-month trailing average of monthly housing starts, in all housing classes, for Newfoundland and Labrador as a whole:

That downward trend in the last two years, on the far right of the graph, is what economists and captains of industry might call “cooling”, not “heating”, let alone “overheating”. Perhaps it's getting hot in here, but it seems likelier at this stage in the economic cycle that the Emperor has already taken off all his clothes.

With the exceptions of certain markets in Labrador, which, in any event, can probably get their drywall as cheaply, or cheaper, from other places besides Corner Brook, where is the overheated construction industry of which the Chairman speaks? Please post such commercial or economic intelligence in the comments box below.


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