The construction cycle is the economy

In the world of United States economics, it has been said that “the construction cycle is the economic cycle”.

Looking at the data, there is certainly a degree of truth to that, with the number of homes under construction peaking and then falling significantly prior to 4 of the last 6 non-pandemic-related recessions.

Perhaps the best example of this is the Global Financial Crisis, with the total number of homes under construction falling by over a quarter before the recession technically began and dropping 36.5% before Lehman Brothers collapsed and the market rout truly began.