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Wright Express Releases Monthly Construction Fuel Consumption Index (FCI) Results
U.S. Construction Industry Activity Up 2.7% Year-Over-Year in September
SOUTH PORTLAND, Maine, Oct 19, 2011 (BUSINESS WIRE) -- Wright Express Corporation (NYSE: WXS), an international provider of 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 2.7% on an annual basis in September.
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 September 2011 data, although reporting a slight decline in fuel consumption from last month, continues to indicate a positive, gradual growth for the construction industry," said Michael Dubyak, Wright Express Chairman and Chief Executive Officer. "The report also helps to substantiate recent construction industry employment gains, with a jump in September similar to a level not seen since February, and reflects a slow, but continuous recovery in activity."
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 September 2011, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies rose by 2.7% versus September 2010; and declined by 0.4% versus the previous month. The positive year-over-year growth shows an encouraging turn for the construction industry as it recovers from low levels.
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 http://www.wrightexpress.com/fci.
September 2011 Wright Express Construction Fuel Consumption Index (FCI)
According to the Wright Express Construction FCI, the construction industry is recovering from low levels of fuel consumption with a positive year-over-year growth throughout 2011. Despite experiencing a month-to-month decline, the index increased 2.7% on an annual basis in September.
After growing in August, the seasonally-adjusted index declined by 0.4% in September. Growth in the seasonally adjusted index has been relatively flat throughout 2011. While growth in the industry has been slow, consistent year-over-year fuel consumption growth suggests construction activity is gradually recovering.
According to IHS's analysis, the September result of the Wright Express Construction Fuel Consumption Index indicates that the construction industry is only making small steps on the road to recovery. For example, the value of construction put in place is up 1% from a year ago, but it remains 34% below its pre-recession peak. Though September's loss in the FCI was minimal, it is a sign that growth in the construction industry is not yet ready to take off. There have been some positive signs in the construction industry, but the housing sector remains a major concern due to pending home foreclosures and weak demand. With sluggish economic growth on the horizon, home construction is not expected to have much pick up until the latter portion of 2012, and sustained improvement is not likely to be evident prior to 2013.
The Wright Express Construction FCI for September 2011 is available at http://www.wrightexpress.com/fci.
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. We found that the greatest insights were 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 September 2011 was 0.897 for the number of new single-family homes for sales and 0.895 for total construction put-in-place.
|New Single-Family Homes for Sale||0.897|
|Total Construction Put-in-Place||0.895|
|New Single-Family Homes for Sale - Under Construction||0.872|
|Total Private Housing Under Construction||0.866|
|S&P/Case-Shiller Home Price Index - Composite 20 Index||0.832|
|Average Sales Price of Existing Single-Family Homes Sold||0.820|
|Residential Construction Put-in-Place||0.759|
|Total Housing Completions, Private||0.732|
|New Single-Family Homes Sold - Completed||0.714|
|Average Sales Price of New Single-Family Homes Sold||0.695|
|Median Sales Price of New Single-Family Homes Sold||0.660|
|Total Private Housing Starts||0.534|
|New Single-Family Homes Sold||0.523|
|Housing Permits, Private||0.520|
|Nonresidential Construction Put-in-Place||0.450|
|New Single-Family Homes Sold - Under Construction||0.283|
About Wright Express
Wright Express Corporation (NYSE: WXS) is an international 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.
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