The stock markets have been the big economic story for the past two weeks. Sparked by the selloff in China, Wall Street exchanges fell more than 10% since Aug. 19 before rebounding 4% yesterday. Unlike the panic in 2008, the decline is likely a correction to what was an overpriced market for U.S. stocks and a readjustment of pricing for lower earnings and slightly higher interest rates.
The big differences between now and 2008 are the lack of leverage in the market - with way less consumer participation - and the ample liquidity that exists. Banks aren't freezing up. Lending isn't affected. And there are plenty of buyers for all the sellers, meaning that someone sees as much upside potential as down. The very fact that the stock market can take a 15 percent hit without causing panic is something of a comfort.
While a big dip in the stock market isn't good for any region's construction market, the health of the underlying economy is still a better barometer. In China's case, GDP growth is still running at a 7% clip, even though manufacturing is down. And this morning's report from the Commerce Dept. showed U.S. growth in GDP was 3.7% in the 2nd quarter, an upward revision from 2.3 % because of much stronger business investment than was originally estimated.
Project News
The late summer vacation season is wrapping up and back-to-school should give a good indication as to how the fourth quarter contracting will go.
West Jefferson Hills School District put the site stabilization package out ahead of its $65 million new high school, which should bid in the fourth quarter. Details of the first phase are at the Builders Exchange.
Carnegie Mellon is emerging as a key player in the future of Pittsburgh's economy and its construction program is matching that role. Earlier this week, CMU announced a $35 million gift from Tata Consulting that will fund construction of the 40,000 sq. ft. TCS Building at the site of the electric car station on Forbes Ave. Earlier this month, the university selected PJ Dick to build its $20-$30 million Forbes/Morewood project, which will tie the new Tepper Quad to The Cut on the existing campus. Next week, JLL will be interviewing six development/design/construction teams to work towards the selection of a team to develop a new hotel and 425,000 sq. ft. of offices in the Junction Hollow along Forbes between the Mehrabian Center and the Carnegie Museums.
The apartment market continues to amaze. With about 4,000 units under construction, pricing is going on for Jendoco's 103-unit Vitmore on Baum Blvd. and the Walnut Capital/PJ Dick team is working on the 78-unit Penn at Walnut on Highland and the first phase of the planned 352-unit apartments on Second Avenue between the Pittsburgh Technology Center and the ALMONO site.
To keep up to date with the market check out BuildingPittsburgh.
