Monthly Construction Index Falls on Murky Outlook

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The monthly Construction MMI® registered a value of 88 in November, a decrease of 1.1 percent from 89 in October.

Construction_Chart_November-2013_FNL
The outlook for the US construction industry in general looks blurry.

The last report released by our friends at Gerdau Market Update, who track a broad range of construction numbers, shows some less-than-optimistic data. Non-residential construction starts, for example, have shown slow and steady growth since the end of the recession. Nevertheless, the rate of change has decreased considerably, denoting a slowdown in the rate of growth and causing concern going forward.

Industrial construction starts increased by 16.2%, 3 months y/y, however it has also seen a downward trend by 20.7% over the last 12 months, primarily due to a 60.7% drop in the total value of power project starts.

U.S. raw steel production and capacity utilization from January through October 19 has dropped by 2.16% compared to the same period last year. U.S. raw steel production remains below 2007 levels and pre-recession utilization levels will likely not go much higher until non-residential construction picks up.

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Finally, the issues that the US federal government has had in resolving the ongoing fiscal crisis has created uncertainty, impacting the country’s confidence.

The weekly U.S. Rocky Mountain bar fuel surcharge fell 2.3 percent. The weekly U.S. Gulf Coast bar fuel surcharge ended the month flat. The weekly U.S. Midwest bar fuel surcharge saw a small decline this month. European 1050 aluminum was down 1.6 percent for the month. Chinese H-beam steel prices fell 1.4 percent after rising the previous month.

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Chinese rebar shifted up 0.9 percent last month. US shredded scrap prices increased slightly from last month.

Prices for 62% Australian iron ore fines remained constant this past month. Chinese aluminum bar also remained unchanged.

Don’t forget to read the October 2013 MMI analysis before November’s full report comes out next week!

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.