The Construction MMI picked up two points, rising 2.5% to 83 for our August reading.
According to U.S. Census Bureau data released Aug. 1, total construction spending in June is estimated at $1,205.8 billion, down from the revised total of $1,221.6 billion in May.
However, the June spending figure is 1.6% above the June 2016 estimate of $1,186.4 billion. In the first six months of this year, construction spending amounted to $577.0 billion, or 4.8% percent above the $550.5 billion for the same period in 2016.
Private construction spending amounted to $940.7 billion, 0.1 percent below the May total of $941.3 billion.
Meanwhile, public construction spending amounted to $265.1 billion, or 5.4% below the revised May estimate of $280.3 billion. Included within public spending was: educational construction ($67.5 billion), 5.5% below the revised May estimate of $71.4 billion, and highway construction ($82.4 billion), 6.6% below the revised May estimate of $88.2 billion.
Last month’s MMI report covered concerns from builders regarding rising materials costs. A couple of the heavy hitters in this basket of metals, Chinese rebar and H-beam steel, posted price increases.
Should the Section 232 investigation yield tariffs or quotas on steel imports, that could drastically impact how construction firms do business. Of course, if President Trump’s comments to the Wall Street Journal last week are any indication, we could all be waiting for a while before any Section 232 verdicts are handed down.
Construction Firms Grow
The Architecture Billings Index (ABI) released monthly by the American Institute of Architects also reports good news for the construction industry.
The ABI rose from 53.0 in May to 54.2 for June (anything over 50 equates to billings growth).
“Despite growth in inquiries into new projects and the value of new design contracts dipping slightly in June, firms continue to report robust backlogs averaging 5.9 months and indicate a steady supply of work in the pipeline,” the June ABI report states.
According to the ABI, Northeast firms reported billings growth for the first time in three months. By region, the South led the way with an ABI score of 54.8, followed by the West (53.1), Midwest (51.9) and Northeast (51.5).
By sector, residential construction led the way (57.1), followed by institutional (52.6) and commercial/industrial (52.1).
Actual Metal Prices
Chinese rebar rose to $594.71/metric ton, while Chinese H-beam steel rose to $547.14/mt. Chinese iron ore rose 0.9% to 78.06/dry metric ton. Chinese aluminum bar, meanwhile, fell slightly to $2,166.25/mt.
U.S. shredded scrap steel fell 2.4% to $288/short ton.
European aluminum 1050 sheet fell 1.3% to $2,731.23/mt.