WEX Inc., in collaboration with IHS, has released results of its WEX Construction Fuel Consumption Index (FCI), which indicated an increase of 3.6 percent in November versus its level the previous year.
The WEX 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.
WEX 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 more than 90 percent of the domestic retail fuel locations and 45,000 vehicle maintenance locations. With this data, the WEX 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 November 2012, the WEX Construction FCI reported that fuel consumption by U.S. construction companies increased 3.6% versus November 2011 and decreased 0.2% versus the previous month.
The WEX Construction FCI, which is available monthly in advance of the U.S. Census Bureau figures on construction spending, is available at http://www.wexinc.com/fuel-consumption-index.
Last month’s WEX Construction FCI was consistent with the encouraging growth indicated by the seasonally-adjusted index in most of the government’s subsequent construction data releases. Construction spending excluding improvements – a good measure of activity – increased by 1.3% in October and private residential construction also showed solid growth of 3.0%. October housing permit statistics were mixed with total permits falling by 2.7%, but they remained 29.8% above their October 2011 level. Housing starts increased by 3.6% in October to an annual rate of 894,000. The stalled growth for the WEX Construction FCI in November coincided with a loss of 20,000 jobs in the construction sector for the same month. Total construction put-in-place, which is released a month later than the Fuel Consumption Index, grew by 1.4% in October.
According to the IHS analysis, despite the month-to-month stalled growth in November for the WEX Fuel Consumption Index, on an annual basis, the Fuel Consumption Index reported the fourth positive year-over-year growth in the last six months. Additionally, the U.S. housing market is improving gradually with new home sales holding steady in October at an annual 368,000-unit annual rate, neither gaining nor losing ground after the preceding three months were revised down.
Home sales inventories grew slightly to 147,000, but remain extremely close to the record low of 143,000 from August 2012. However, this is good news since low inventories will spur builders to put up new homes or else lose sales in addition to higher prices. In October, the average price of a new home was 8.0% higher than the previous year, which is still a strong indicator, albeit not as strong as the previous two months. Although new home sales are on a slow upward trend, they are not expected to reach normal levels of above 800,000 until 2015.
The WEX Construction FCI for November 2012 is available at http://www.wexinc.com/fuel-consumption-index