The monthly Construction MMI® fell by two points from 87 to 85 this month, due to lower LME aluminum prices and H-beam prices in China:
Unlike the Automotive MMI®, which serves as a leading economic indicator, the Construction MMI® appears to perform as a coincidental indicator, meaning it performs as the market does.
The news for June construction appears less than rosy. According to our friends at Reed Construction Data, several indicators fell this past month, including a newly revised [lower] GDP growth rate from 2.4 to 1.8 during Q1 2013, lower investment in nonresidential construction spending (particularly power construction spending, which fell 8.3%) and lower consumer spending with a revised increase of 2.6% instead of 3.4% as originally reported.
“But not all of the news appears negative,” said Lisa Reisman, managing editor of MetalMiner.
“In fact, most of the residential construction data appears positive, including housing starts, the number of new single family building permits, and multi-family housing starts,” Reisman said. Even the Architecture Billings Index increased, suggesting an increase in the number of new construction projects.
Nevertheless, we will continue to watch this index closely.
Key Index Price Drivers
A 5.4 percent drop over the past month left Chinese H-beam steel lower. After falling 4.1 percent, European 1050 aluminum finished the month down too. The weekly US Gulf Coast bar fuel surcharge declined 3.2 percent. The weekly US Rocky Mountain bar fuel surcharge fell a slight 1.8 percent over the past month. The weekly US Midwest bar fuel surcharge ended the month down as well.
Chinese aluminum bar held pat last month. US shredded scrap experienced a flat month too.
The Construction MMI® collects and weights 9 metal price points used within the construction industry to provide a unique view into construction industry price trends over a 30-day period. For more information on the Construction MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.