Construction MMI: Architecture Billings Growth Slows

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Metal Prices

The Construction Monthly Metals Index (MMI) fell seven points, down to a December MMI reading of 82.

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U.S. Construction Spending

Estimated U.S construction spending in October fell 0.1% from September according to Census Bureau data, but marked a 4.9% increase from the October 2017 spending total.

Spending in October hit an estimated seasonally adjusted annual rate of $1,308 billion, the lowest monthly spending total since March ($1,293 billion).

As for private construction, spending was at a seasonally adjusted annual rate of $998.7 billion, down 0.4% from the revised September estimate of $1,003.0 billion.

Within the umbrella of private constriction, residential construction hit $539.0 billion in October, down 0.5% from the revised September estimate of $541.7 billion. Nonresidential construction reached $459.7 billion in October, down 0.3% from the revised September estimate of $461.3 billion.

Public construction hit $310.2 billion, up 0.8% from the revised September estimate of $307.8 billion.

Within public construction, educational construction hit $76.9 billion, up 2.6% from the September estimate of $75.0 billion. Highway construction reached $94.6 billion, down 0.1% from the revised September estimate of $94.6 billion.

October Sees Only Slight Billings Growth

The Architecture Billings Index (ABI), put out monthly by the American Institute of Architects, reached a value of 50.4 for October, down from 51.1 in September. A reading of 50 indicates no growth, with anything greater signifying growth.

“Although growth is still occurring, the pace of that growth has continued to ebb and flow through much of the year,” the ABI report states. “But the outlook still remains positive, as inquiries into new work remain strong, and the value of new signed design contracts remains relatively strong as well.”

By region, the Midwest led the way with a reading of 57.8, followed by: the Northeast (51.8), the South (48.4) and the West (46.9).

“Regionally, conditions look to be changing from the trends that have dominated so far this year,” the report states. “Billings at firms in the Northeast rebounded modestly in October, following several months of softness, while billings declined at firms located in the South and West, where conditions have been strong recently. However, it is too early to say if this is a one-month blip or a more protracted change.”

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Actual Metal Prices and Trends

Chinese rebar plunged 20.2%, down to $544.74/mt, while Chinese H-beam steel fell 12.2% to $540.39/mt. It remains to be seen whether the U.S. and China can reach an agreement to deescalate trade tensions during the 90-day window agreed upon at the Group of 20 (G20) summit this past weekend in Argentina.

U.S. shredded scrap steel rose 4.7% to $358/st.

European commercial 1050 aluminum sheet fell 4.0% to $2,644.47/mt, while Chinese aluminum bar fell 1.6% to $2,139.75/mt.

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