US Construction Spending Hit Highest Level Since ’08 Last Year

Construction spending rose in December to a 6-year high of $982 billion as public construction for the year increased for the first time since 2009, according to an analysis by the Associated General Contractors of America.

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“For the first time in nearly a decade there was growth in all 3 major construction segments-public, private nonresidential and residential,” said Ken Simonson, the association’s chief economist. “If the president and Congress can work out a way to pay for long-term investments in our aging infrastructure, there is a good chance this pattern will repeat in 2015.”

Construction spending in December totaled $982 billion at a seasonally adjusted annual rate, 0.4% higher than in November, 2.2% higher than in December 2013, and the highest monthly figure since December 2008, Simonson noted. The full year total of $961 billion was up 5.6% from 2013 and was the highest full year amount since 2008.

Private residential spending in December climbed 0.3 percent from November but slid 4% from a year earlier, while private nonresidential spending slipped 0.2% for the month but rose 5.3 percent year-over-year. Public construction spending increased 1.1% from November and 6.7% from December 2013. For the full year, private residential spending rose 4.1%, private nonresidential spending climbed 11%, and public spending grew 1.8%.

This past week, US shredded scrap dropped 5.4% on the weekly Construction MMI®, landing at $318.00 per short ton as the week’s biggest mover. Chinese H-beam steel weakened by 4.2% to land at CNY 2,290 ($365.73) per metric ton. The price of Chinese rebar fell 2.7% over the past week to CNY 2,480 ($396.08) per metric ton. This was the fourth week in a row of declining prices. At CNY 970.00 ($154.92) per dry metric ton, the Chinese low price of 62% Australian iron ore fines remained essentially flat.

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European 1050 aluminum rose 4.7% over the past week to EUR 2,617 ($2,968) per metric ton. The price of Chinese aluminum bar rose 1.3% to CNY 12,920 ($2,063) per metric ton after falling 0.2% during the previous week.

The weekly US Midwest bar fuel surcharge fell 2.4% over the past week to $0.31 per mile. This was the third week in a row of declining prices. The weekly US Rocky Mountain bar fuel surcharge fell 1.8% over the past week to $0.31 per mile. This was the third week in a row of declining prices. The weekly US Gulf Coast bar fuel surcharge fell 1.1% over the past week to $0.31 per mile. This was the third week in a row of declining prices.

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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.