In The Construction Monthly Metals Index (MMI) increased by 0.6% month over month.
US construction spending rose in 2021
U.S. construction spending reached a seasonally adjusted annual rate of $1,639.9 billion in December, the Census Bureau reported. The December rate marked a 0.2% increase from the revised rate November. Furthermore, the December figure jumped by 9.0% compared with December 2020.
For all of 2021, construction spending totaled $1,589.0 billion, up 8.2% year over year.
Private construction spending in December reached a rate of $1,292.9 billion, up 0.7% month over month. Within private construction, residential construction totaled $810.3 billion in December, up 1.1% from November. In addition, nonresidential construction remained virtually unchanged month over month. December’s spending totaled $482.6 billion from $482.7 billion in November.
At the same time, public construction reached $347.0 billion, down 1.6%. Educational construction checked in at $81.0 billion, down 1.4%. Highway construction rose by 0.1% to a rate of $103.5 billion.
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Nonresidential construction activity remains strong
Meanwhile in the U.S., the Architecture Billings Index (ABI) remains in growth for the eleventh consecutive month. The index increased to 52 in December from 51 the month prior. Any reading greater than 50 indicates billings growth. With an approximate lead time of 9-12 months, the ABI serves as a forward-looking indicator for nonresidential construction.
In addition, design contracts likewise remained in growth as the measure held flat month-over-month at 55.8. Meanwhile, architecture firms continue to report a steady number of projects into the future. Both inquiries and the value of new contracts remain strong. Backlogs stand at an average of 6.5 months, near historical highs. This suggests material demand from the sector will remain strong well into the year.
Housing starts rose in December
Meanwhile, in the housing market, U.S. housing starts reached a seasonally adjusted annual rate of 1.702 million in December, the Census Bureau reported. The December rate marked a 1.4% rise from the previous month and a 2.5% year-over-year rise.
Finally, single family housing starts fell 2.3% to a rate of 1.172 million. For units in buildings with five units or more, the rate reached 524,000. In total, 2021 saw an estimated 1.5951 million housing units started to reflect a 15.6% year-over-year rise.
Metal buying organizations can track a broad range of monthly price changes via the monthly MMI report.
Lumber prices hit record highs
As construction activity remains strong, lumber prices continue to climb on pace. Both 2020 and 2021 saw prices hit record highs. Furthermore, in 2020, framing lumber prices averaged around $550. By 2021, the average surged to $850, 17% above the 25-year average. Prices continue upward in 2022.
Moreover, in the early days of February, lumber prices jumped almost 30%. Lumber futures stood at $934.90 per thousand board feet on Feb. 1. By Feb. 9, futures prices hit $1,204.90 per thousand board feet. Although lumber prices remain historically high, prices sit beneath the record peak reached in May of 2021 of $1,711.
Actual metals prices and trends
The Chinese rebar steel price rose 3.14% month over month to $768 per metric ton as of Feb. 1. Chinese H-beam steel rose by 6.1% to $790 per metric ton.
The U.S. shredded scrap steel price fell by 4.76% to $480 per short ton.
Finally, European 1050 commercial aluminum sheet rose by 6.82% to $4,832 per metric ton.
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