The Construction MMI stood pat this past month, holding at 94 for our February reading.
U.S. shredded scrap steel jumped 7.7%. European 1050 sheet aluminum dropped marginally (by 0.05%), while the Chinese aluminum bar price jumped 1.7%.
U.S. Construction Spending
According to the most recently available Census Bureau data, U.S. construction spending in December 2017 amounted to $1,253.3 billion, up 0.7% from the revised November estimate of $1,245.1 billion.
December 2017 spending was up 2.7% year over year, compared with the $1,221.6 billion spent in December 2016.
By value, the value of construction in 2017 was $1,230.6 billion, up 3.8% from $1,185.7 billion in 2016.
Private construction spending grew more than its public counterpart. Private construction spending jumped 0.8% from the previous month to $963.2 billion, Within that umbrella, residential and nonresidential spending jumped 0.5% and 1.1%, respectively.
The value of private construction in 2017 was $950.7 billion, up 5.8% from the $898.7 billion spent in 2016. Residential construction in 2017 was $515.9 billion, up 10.6% from the 2016 figure of $466.6 billion and nonresidential construction was $434.8 billion, up 0.6% from the $432.1 billion in 2016.
Meanwhile, public construction spending jumped 0.3% to $290 billion in December 2017 from the previous month. Educational construction spending jumped 1.6% from November, while highway construction picked up a 0.3% spending gain.
Home Sales Down in December but Up for the Year
According to the National Association of Realtors, existing-home sales dropped in December but were up 1.1% for 2017.
The 5.51 million sales executed in 2017 marked the highest total since 2006 (6.48 million).
“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Lawrence Yun, the NAR’s chief economist, in a prepared statement. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”
New housing starts, however, were down significantly in December.
According to jointly released data from the Census Bureau and the U.S. Department of Housing and Urban Development, new home starts in December dropped 8.2% compared with November totals. The 1,192,000 housing starts in December also marked a drop compared with December 2016, falling by 6.0%.
The Future of Construction
According to an article in Forbes, three trends could have a significant impact on the construction industry: robotics, drone imagery and digital project collaboration tools.
“Construction will benefit from robotics in work that is dangerous, is repetitive, and where heavy lifting is required,” Zak Podkaminer, of Construction Robotics, told Forbes. “[In] high precision work such as complex designs and patterns, robotics will provide a significant time savings allowing for more digital fabrication and provide architects more creative flexibility.”
Actual Metal Prices and Trends
Chinese rebar dropped 6.6% to $644/metric ton, while Chinese H-beam steel rose 3.3% to $637.64/mt.
U.S. shredded scrap steel jumped 7.7% to $323/short ton. European 1050 sheet aluminum dropped marginally (by 0.05%) to $3,106/mt, while the Chinese aluminum bar price jumped 1.7% to $2,463.10/mt.