Construction MMI: U.S. Construction Spending Flat in September

The Construction Monthly Metals Index (MMI) dropped one point this month, down to a November MMI reading of 89.
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U.S. Construction Spending

The U.S. Census Bureau released data late last week on construction spending for September, showing spending held flat from the previous month.
Construction spending in September reached an estimated $1,329.5 billion, which was up 7.2% from September 2017.
Meanwhile, through the first nine months of 2018 spending was up 5.5% compared with the same time frame in 2017.
Broken down by type, private construction spending hit a seasonally adjusted annual rate of $1,020.4 billion, which marked a 0.3% increase from the revised August estimate of $1,016.9 billion. Within private construction, residential construction reached a seasonally adjusted annual rate of $556.4 billion in September, up 0.6% from the previous month. Nonresidential construction was at a seasonally adjusted annual rate of $463.9 billion in September, up 0.1% from August nonresidential construction spending.
Meanwhile, the estimated seasonally adjusted annual rate of public construction spending was $309.1 billion, a 0.9% drop from August. Educational construction was at a seasonally adjusted annual rate of $74.6 billion, up 1.2%. Highway construction was at a seasonally adjusted annual rate of $95.2 billion, 1.1% below the revised August estimate.

Architecture Billings Growth Slows but Remains Positive

The American Institute of Architects recently released its monthly Architecture Billings Index (ABI), which showed billings growth yet again for September.
The ABI hit a value of 51.1 for the month (anything above 50 indicates billings growth).
“Although the pace of billings growth slowed somewhat from August, billings have remained positive for the entire year so far, indicative of generally strong conditions at firms,” the ABI report states. “The value of new signed design contracts increased in September as well, after a modest decline in August, and inquiries into new projects remained strong.”
By region, the Midwest led the way with an ABI value of 59.7, trailed by the South (54.1), West (51.3) and Northeast (46.6).
The ABI report also includes a monthly survey of industry professionals on a particular topic, this month being revenue and profitability.
For 2018, the answers were mostly optimistic.
“Overall, responding architecture firms anticipate net revenue growth of an average of 7.5 percent for 2018, with more than half of firms (56 percent) reporting that their net revenue will increase from 2017 to 2018,” the report states. “An additional 23 percent expect net revenue to remain about the same as last year, and the remaining 21 percent expect a decline.”
Next year, however, might not be as rosy.
“Architecture firms project net revenue to grow by an average of 3.8 percent in 2019, about half as much as in 2018, with just 43 percent of firms expecting an increase in revenue for the year,” the report continues. “The share of firms expecting a decline in revenue in 2019 is about the same as in 2018 (23 percent versus 21 percent), but one third of firms (34 percent) expect revenue to be flat in 2019.”

Actual Metal Prices and Trends

Chinese rebar held flat at $682.55/mt. Chinese H-beam steel rose 0.2% to $615.16/mt. Chinese aluminum bar fell 3.6% to to $2,175.28/mt.
U.S. shredded scrap steel fell 2.3% to $342/st.
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European aluminum sheet fell 2.7% to $2,753.30/mt.