Construction MMI: April Construction Spending Up 7.6% Year Over Year

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The Construction Monthly Metals Index (MMI) held flat for the month, posting a 95 for our June reading.

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U.S. Construction Spending

Construction spending for April, the month with the most recently available Census Bureau data, picked back up.

Total spending during April 2018 hit an estimated seasonally adjusted annual rate of $1,310.4 billion, according to the Census Bureau. That total marks a 1.8% increase from the March estimate of $1,286.8 billion. Compared with April 2017, the April 2018 spending was up 7.6%.

Construction spending through the first four months of 2018 was up 6.6% — to $387.0 billion — from the same period last year.

Private construction spending reached a seasonally adjusted annual rate of $1,014.3 billion, or 2.8% above the revised March estimate of $986.6 billion. Residential construction reached $556.3 billion in April, or 4.5% (±1.3 percent) above the revised March estimate. Nonresidential construction was at a seasonally adjusted annual rate of $458.0 billion, up 0.8% from March.

Public construction spending was $296.1 billion, good for a decrease of 1.3% from the revised March estimate of $300.1 billion. Educational construction held flat at $74.2 billion. Highway construction reached $88.0 billion, dropping 1.0% below the March total.

Billings Growth Continues to Rise

Billings have been enjoying a solid run, a run that continued in April, according to the Architecture Billings Index (ABI), which is put out monthly by the American Institute of Architects.

The ABI for April hit 52, signifying billings growth (a reading of 50 means no growth, with anything greater signaling billings growth). The April reading marked the seventh straight month of positive billings growth, according to the ABI report.

“Growth rates for billings, inquiries, and new design contracts are basically keeping pace with 2017, so architecture firms should see another solid year of business activity,” the report states.

Generally healthy employment levels could also be specifically seen in the construction sector, as the industry has added more than 100,000 payroll positions in the year to date, according to the ABI report. In 2017, the sector saw the addition of 250,000 payroll positions.

Broken down by region, the West had the strongest month, posting an ABI of 55.1. The West region was followed by: the South (51.8), Northeast (50.3) and Midwest (49.6).

Pause on Trump’s Infrastructure Plans

The need to improve and maintain infrastructure is often considered the most bipartisan of goals — after all, everyone hates potholes.

As a presidential candidate, Donald Trump campaigned on the promise of infrastructure spending. As president, earlier this year he touted his $1.5 trillion infrastructure plan (which later actually came out to be about $1.7 trillion). The plan, which was released in February, was to include $200 billion in federal spending and sought public-private partnerships.

But those plans seem to have hit a roadblock, and seem unlikely to happen this year.

Actual Metal Prices and Trends

Chinese rebar steel fell 3.1% to $619.71/mt, while H-beam steel fell $1.02 to $638.44/mt. Chinese 62% Australia low price iron ore PB fines dropped from $82.89 per dry metric ton to $81.95.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

U.S. shredded scrap steel fell $2 to $370/st. European commercial aluminum sheet fell 0.3% to $3,075.21.

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