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Wright Express Releases Monthly Construction Fuel Consumption Index (FCI) Results

U.S. Construction Industry Activity Up 0.9% Year-Over-Year in October

SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Nov. 16, 2011-- Wright Express Corporation (NYSE: WXS), a leading global provider of value-based business payment processing and information management solutions, in collaboration with IHS (NYSE: IHS), a leading provider of global economic and financial intelligence, today released results of its Wright Express Construction Fuel Consumption Index (FCI), which indicated an increase of 0.9% on an annual basis in October.

The Wright Express Construction FCI measures national fuel consumption statistics for the construction industry, which provides an accurate and up-to-date indication of construction activity in the United States. The construction segment comprises approximately 20% of the Wright Express portfolio of customers.

Wright Express worked with IHS Consulting and Advisory Services to capture and analyze transaction data from its closed loop network of more than 180,000 fuel and vehicle maintenance locations, including over 90 percent of the domestic retail fuel locations and 45,000 vehicle maintenance locations. With this data, the Wright Express Construction FCI can be used to identify emerging trends within the construction industry and the national economy.

"The analysis of the October 2011 data suggests the construction industry is slowly inching forward on an annual basis," said Michael Dubyak, Wright Express Chairman and Chief Executive Officer. "The report also shows, in looking back to September, an increase in private construction by 0.6%, and a possibility that rebuilding after Hurricane Irene is what gave construction employment a temporary boost in September.”

The indicators were tested at monthly, quarterly, and annual frequencies, with the greatest insights produced using the year-over-year percent change of the monthly data. For October 2011, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies rose by 0.9% versus October 2010; and declined by 1.8% versus the previous month.

The Wright Express Construction FCI, which is available monthly in advance of the U.S. Census Bureau of the Department of Commerce figures on construction spending, is available at www.wrightexpress.com/fci.

October 2011 Wright Express Construction Fuel Consumption Index (FCI)

According to the Wright Express Construction FCI, the construction industry is in neutral, which will take some time to recover. Despite experiencing a month-to-month decline, the index increased 0.9% on an annual basis in October, and consistent annual growth provides a glimmer of hope.

IHS Analysis

According to IHS’s analysis, the October result of the Wright Express Construction Fuel Consumption Index reflects the state of the stalled construction industry. Throughout 2011, small monthly gains have been offset by subsequent losses, while the construction industry slowly inches forward on an annual basis. After two consecutive month-to-month declines in the seasonally adjusted index, it is evident that growth in the construction industry is not yet ready to take off. Construction spending is expected to pick up somewhat in 2012, with more substantial gains coming in 2013 when housing returns. Pent-up demand for housing is building as young adults stay at home, and at some point will spark a major revival in housing activity.

The Wright Express Construction FCI for October 2011 is available at www.wrightexpress.com/fci.

Index Methodology

The Wright Express Construction Fuel Consumption Index (Wright Express Construction FCI) was developed by IHS Global Insight with support from Wright Express. The index is based on monthly fuel consumption statistics for the construction industry tracked by Wright Express's comprehensive fuel consumption database. The Wright Express Construction FCI provides unique fuel transaction information that can be used to identify emerging trends in the construction industry. By tracking the volume of fuel consumed by construction companies in the United States, the index provides an accurate and up-to-date indication of construction activity in the country.

The construction industry was defined by 1987 Standard Industry Classification (SIC) codes 15 (General building contractors), 16 (Heavy construction contractors), and 17 (Special trade contractors). Data from Wright Express's fuel transaction database was "cleaned" based on a criteria developed by IHS Global Insight with input from Wright Express. The sample included only accounts that had been active for at least two years. In this way, IHS Global Insight was able to effectively capture the construction market's fuel consumption activity. In order to create an accurate index, the fuel consumption data from each SIC industry code were weighted based on the number of companies in each industry.

IHS Global Insight analyzed the relationship between sixteen different construction and housing indicators and the construction sector fuel consumption data provided by Wright Express. Correlation tests were conducted on each of the indicators against the volume of gallons consumed, the volume of gallons consumed per effective fueling day, the volume of gallons consumed per active card per effective fueling day. All series were tested at seasonally adjusted rates, as well as non-seasonally adjusted rates.

The indicators were tested at monthly, quarterly, and annual frequencies with the greatest insights produced using the year-over-year percent change of the monthly data. After determining the top three indicators, additional correlation tests were conducted to determine the optimal transformation of the Wright Express fuel consumption data. Through this analysis, it was revealed that the Wright Express Construction FCI for construction was a particularly strong indicator of the value of total construction put-in-place and construction industry employment in the United States. The overall correlation based upon monthly year-over-year growth rates from January 2002 to October 2011 was 0.897 for the number of new single-family homes for sales and 0.896 for total construction put-in-place.

Indicator   Correlation
New Single-Family Homes for Sale   0.897
Total Construction Put-in-Place 0.896
Construction Employment 0.884
New Single-Family Homes for Sale - Under Construction 0.873
Total Private Housing Under Construction 0.863
S&P/Case-Shiller Home Price Index - Composite 20 Index 0.832
Average Sales Price of Existing Single-Family Homes Sold 0.821
Residential Construction Put-in-Place 0.760
Total Housing Completions, Private 0.723
New Single-Family Homes Sold - Completed 0.715
Average Sales Price of New Single-Family Homes Sold 0.695
Median Sales Price of New Single-Family Homes Sold 0.658
Total Private Housing Starts 0.523
New Single-Family Homes Sold 0.520
Housing Permits, Private 0.513
Nonresidential Construction Put-in-Place 0.452
New Single-Family Homes Sold - Under Construction   0.281
 

About Wright Express

Wright Express Corporation (NYSE: WXS) is a leading provider of value-based, business payment processing and information management solutions. The Company's fleet, corporate, and prepaid payment solutions provide its more than 350,000 customers with unparalleled security and control across a wide spectrum of business sectors. The Company's subsidiaries include Wright Express Financial Services, Pacific Pride and Wright Express International, including Wright Express Prepaid Cards Australia and Wright Express Fuel Cards Australia. Wright Express and its subsidiaries employ more than 850 associates in six countries. For more information about Wright Express, please visit wrightexpress.com.

About IHS

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,100 people in more than 30 countries around the world.

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Source: Wright Express Corporation

News media contact:
Wright Express
Jessica Roy, 207-523-6763
Jessica_Roy@wrightexpress.com
or
Investor contact:
Wright Express
Steve Elder, 207-523-7769
Steve_Elder@wrightexpress.com