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Wright Express Corporation, in collaboration with IHS, today released results of its Wright Express Construction Fuel Consumption Index (FCI), which indicated a decrease of 0.6% in February versus its level the previous year.
The Wright Express Construction FCI measures national fuel consumption statistics for the construction industry, providing an indication of construction activity in the United States. The construction segment comprises approximately 20% 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 February 2012, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies decreased by 0.6% versus February 2011 and increased by 1.1% versus the previous month.
“The analysis of the February 2011 FCI data has been mixed for the construction industry,” said Michael Dubyak, chairman and chief executive officer of Wright Express. “The 1.1% increase in fuel consumption in February 2012 is a nice rebound from the previous month; however in January 2012 total construction put-in-place declined 0.1%, with construction spending excluding improvements falling 0.3%.”
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.
February 2012 Wright Express Construction Fuel Consumption Index (FCI)
According to the Wright Express Construction FCI, a true recovery remains a long way off, but the construction industry has seen small growth in recent months with improvements extending into this year. Additionally, while increases are likely unsustainable given the budgetary problems confronting state and local governments, infrastructure spending posted a solid 1.0% increase and is up 6.8% over the past six months.
According to the IHS analysis, the February result of the Wright Express Construction Fuel Consumption Index reflects the slowly recovering construction industry. After falling 2.0% in January, the seasonally-adjusted index regained some ground in February. Housing inventory dropped to 2.31 million units in January, the lowest level since March 2005. These numbers suggest that the housing glut is going away; however, other data suggest that getting rid of the excess will be a drawn-out affair that will take at least two more years. For example, the homeowner vacancy rate, which measures the proportion of homes that are vacant and for sale, stood at 2.3% in the fourth quarter of 2011, down from 2.7% four quarters earlier. This vacancy rate is consistent with a glut of about a 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 construction numbers for 2011 were dismal. Total construction spending was at its lowest level since 1999. But the numbers improved as the year went on. The improvements will extend into this year. Still, 2012 is not expected to be much better than 2011 for the construction industry.
The Wright Express Construction FCI for February 2012 is available at www.wrightexpress.com/fci.