Construction MMI®: Architecture Billings Up, Housing Starts Down

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Buoyed by sustained demand for apartments and condominiums and coupled with state and local governments moving ahead with delayed public projects, the Architecture Billings Index (ABI) from the American Institute of Architects has been positive for seven consecutive months. The ABI is an indicator of billings for design services and and not actual construction, as such it reflects an approximate 9 to 12 month lead time.

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The November ABI score was up slightly at 50.9 (any number above 50 reflects an increase in billings), down from a mark of 53.7 in October.

“Demand for design services has slowed somewhat from the torrid pace of the summer, but all project sectors are seeing at least modest growth,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Architecture firms are expecting solid mid-single digit gains in revenue for 2014, but heading into 2015, they are concerned with finding quality contractors for projects, coping with volatile construction materials costs and with finding qualified architecture staff for their firms.”

The Commerce Department also reported that housing starts fell 1.6% in November. It was the first monthly decline since August. Building permits also fell. However, even with the dip, there are still more than 1 million homes being built on an annualized rate in the US.

Chinese aluminum bar dropped to CNY 13,330 ($2,153) per metric ton making it the biggest mover on the weekly Construction MMI® this week, after drifting 7.1%. European 1050 aluminum remained essentially flat from the previous week at EUR 2,613 ($3,238) per metric ton.

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Chinese H-beam steel prices fell to CNY 2,850 ($460.39) per metric ton, down from CNY 3,000 ($485.87) a week ago. The price of Chinese rebar fell 0.7% over the past week to CNY 2,870 ($463.62) per metric ton. This was the fourth week in a row of declining prices. The Chinese low price of 62% Australian iron ore fines stayed essentially flat at CNY 970.00 ($156.70) per dry metric ton. US shredded scrap prices held steady from the previous week at $328.00 per short ton.

The weekly US Midwest bar fuel surcharge dropped 6.2% this week, closing out the third consecutive week of falling prices at $0.45 per mile. The weekly US Rocky Mountain bar fuel surcharge fell 6.2% over the past week to $0.46 per mile. This was the fourth week in a row of declining prices. The weekly US Gulf Coast bar fuel surcharge fell 4.8% over the past week to $0.42 per mile. This was the fourth week in a row of declining prices.

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. 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.

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