The monthly Construction MMI® registered a value of 89 in July, an increase of 2.3 percent from 87 in June.
Construction markets benefited from the first truly warm month of the year in the Eastern US as data from the Bureau of Labor Statistics showed the economy created 6,000 new construction jobs in June. Non-farm payrolls were up 288,000 in June. This was above economists’ expectations and April and May job numbers were revised upward as well.
Construction employment rose in 218 of America’s 339 metropolitan areas between May 2013 and May 2014, with 40 states and Washington, D.C., adding jobs year-over-year, according to the Associated General Contractors of America.
Ken Simonson, AGC’s chief economist, reports that “a survey released on June 25 by Thompson Research Group found 52.9% of contractors reported an increase in bidding activity and 54.6% of construction insurance sureties reported an increase in bonding requests over the last three months (year-over-year). Improvement has been broad-based across sectors … building material/product prices were also up sequentially in select categories.
While the construction metals sector is not seeing prices move up by leaps and bounds, it is building impressive momentum and gathering steam the way a heavy object would slowly slide down a greased, 5% plane.
The one thing that does loom over this steady momentum like the sword of Damocles, is the continued stalemate over federal highway funding for 2015 and beyond.
Lawmakers are under pressure to refill the Highway Trust Fund when they return to Washington after the Fourth of July weekend or risk losing thousands of construction jobs that could set back recent job growth. The Department of Transportation has warned that allowing the Highway Trust Fund to go broke would cost the U.S. about 700,000 jobs — more than twice the 288,000 that were created last month, according to the jobs report.
Transportation has said that it will have to begin cutting back payments to state and local governments next month if a new bill is not passed soon.
The price of European 1050 aluminum climbed 4.5 percent to $3,062 per metric ton. The weekly US Gulf Coast bar fuel surcharge rose a slight 1.3 percent over the past month to $0.52 per mile.
US shredded scrap prices fell 3.9 percent to $370.00 per short ton. The value of Chinese rebar weakened by 1.5 percent this month, settling at $512.53 per metric ton. With a 0.7 percent decline, the weekly US Rocky Mountain bar fuel surcharge closed the month at $0.54 per mile. The weekly US Midwest bar fuel surcharge fell a slight 0.2 percent over the past month to $0.53 per mile.
The Chinese low price of 62% Australian iron ore fines held pat last month at $156.34 per dry metric ton. Chinese aluminum bar traded sideways last month, staying around $2,289 per metric ton. Hovering around $520.59 per metric ton for the month, Chinese H-beam steel remained unchanged.
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.