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|Wright Express Releases Monthly Construction Fuel Consumption Index (FCI) Results|
U.S. Construction Industry Fueling Down 0.3% Year-Over-Year in April; Down 2.8% versus Previous Month
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
“Considering the seasonally-adjusted index grew by 3.9% in the previous
month, the results of the
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
The Wright Express Construction FCI, which is available monthly in
advance of the
Last month’s Wright Express Construction FCI showed unusually strong growth in March and accurately captured the evident general improvement reflected in the most recent government industry data. Construction spending excluding improvements – a good measure of activity – grew 0.4% in March. Total construction put-in-place, increased by 0.1% in March. Also in March, private residential construction excluding improvements rose 2.9%, while private nonresidential spending increased by 0.7%.
Additionally, the Wright Express Construction FCI showed a similar pattern of volatility in March and April compared with the U.S. Census Bureau’s recently released statistics on housing permits. The number declined 7.0% in April to an annual rate of 715,000, after a revised increase of 8.7% in March.
According to the IHS analysis, despite recent gains, the industry's growth has lost some momentum. After three years of depressed construction, the inventory of new housing is beginning to tighten. Similar to February, new home sales continued to decline in March, but inventory continues to shrink. This is good news since builders will have to replenish stocks by ramping up starts once demand rebounds. Although, getting rid of the excess housing supply could be a drawn-out affair. The homeowner vacancy rate measuring the proportion of homes that are vacant and for sale was 2.3% at the end of 2011. This vacancy rate is consistent with a glut of about one half of a million houses. At the current pace, eliminating the overhang should take less than two years, but will probably take longer, because it is concentrated in a few high-unemployment states.
The Wright Express Construction FCI for
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Wright Express Corporation