U.S. construction industry fueling down 3.4 percent year-over-year
Wright Express Corp., a provider of value-based business payment processing and information management solutions, in collaboration with IHS, a global source of information and analysis, has released results of its Wright Express Construction Fuel Consumption Index (FCI), which indicated a decrease of 3.4 percent in January versus its level the previous year.The Wright Express Construction FCI measures national fuel consumption statistics for the construction industry, which provides an accurate and up-to-date indication of construction activity in the United States. The construction segment comprises nearly 20 percent of the Wright Express portfolio of customers.
Wright Express worked with IHS to capture and analyze transaction data from its closed loop network of more than 180,000 fuel and vehicle maintenance locations, including over 90 percent of the domestic retail fuel locations and 45,000 vehicle maintenance locations. With this data, the Wright Express Construction FCI can be used to identify emerging trends within the construction industry and the national economy.
The indicators were tested at monthly, quarterly, and annual frequencies, with the greatest insights produced using the year-over-year percent change of the monthly data. For January 2012, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies decreased by 3.4 percent versus January 2011 and decreased by 2.1 percent versus the previous month.
The analysis of the recently released construction data shows mild improvement for the construction industry. There were 21,000 nonresidential sector jobs added in January, and total construction put-in-place expanded 1.5 percent in December. Construction spending excluding improvements – a better measure of activity – was up a solid 1.8 percent.
The Wright Express Construction FCI, which is available monthly in advance of the U.S. Census Bureau figures on construction spending, is available at www.wrightexpress.com/fci.
January 2012 Wright Express Construction Fuel Consumption Index (FCI)
According to the Wright Express Construction FCI, a full recovery is still a long way off, but the construction industry is expected to improve in 2012. Additionally, while continued infrastructure spending is expected to decline moderately over the course of 2012 as state and local governments are faced with budgetary constraints, it increased again in December by 1.1%.
According to the IHS analysis, the January result of the Wright Express Construction Fuel Consumption Index indicates that the state of the U.S. construction industry may not be as positive as recent construction data suggests. While the seasonally-adjusted index was nearly flat in December and fell in January, some construction industry data have shown growth in recent months. Growth in these indicators must not be overemphasized, as the level of spending in the industry remains very low. In the past two months, construction employment has grown by 52,000 jobs, but the industry still employs 2 million fewer people than it did at its peak in 2007. Growth in the housing market will accelerate in 2013, but conditions will not return to normal until about 2015, when housing starts finally climb above the 1.5-million threshold.
The Wright Express Construction FCI for January 2012 is available at www.wrightexpress.com/fci.
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