U.S. Construction Industry Fueling Up 0.8% Year-Over-Year in June; Down 3.3% versus Previous Month
SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Jul. 25, 2012-- Wright Express Corporation (NYSE: WXS), a leading global provider of value-based business payment processing and information management solutions, in collaboration with HIS (NYSE: IHS), the leading global source of information and analytics, today released results of its Wright Express Construction Fuel Consumption Index (FCI), which indicated an increase of 0.8% in June versus its level the previous year.
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 results of the June 2012 Fuel Consumption Index show a slow recovery for the construction industry," said Rick Pomerleau, vice president, corporate development at Wright Express. "Despite the decrease from the previous month, the continued year-over-year gain in fuel consumption during the previous three months gives a more optimistic outlook for the remainder of the year."
Wright Express worked with IHS 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 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 June 2012, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies increased by 0.8% versus June 2011 and decreased by 3.3% versus the previous month.
The Wright Express Construction FCI, which is available monthly in advance of the U.S. Census Bureau figures on construction spending, is available at http://www.wrightexpress.com/fci.
Last month's Wright Express Construction FCI accurately captured the increased construction spending evident in many of the government's subsequent construction data releases. Construction spending excluding improvements - a good measure of activity - expanded by 0.5% in May. Private residential construction increased by 2.5% reflecting this year's pickup in single-family housing starts. Housing permits rose 7.9% in May to a 780,000 annual rate - the highest level since September 2008. Total construction put-in-place increased by 0.9% in May.
According to the IHS analysis, the recent decline of the Wright Express Construction FCI over the previous months suggests that the industry will have a temporary setback in recovery. New home sales rose 7.6% in May, but sales levels remain extremely low. Home sales are expected to continue to make slow, but steady gains in the months ahead.
The key obstacle to the recovery is tight credit, which is why sales to buyers looking for a home have been only inching up in recent months. Loosening credit would require that Freddie Mac and Fannie Mae lower their standards - something their regulator, the Federal Housing Finance Agency, has yet to approve. The homeowner vacancy rate measuring the proportion of homes that are vacant and for sale was 2.2% in the first quarter of 2012. During the 20-year period ended in 2005, the homeowner vacancy rate number seldom varied from 1.7% making the 0.5 percentage points too high, which translates into an oversupply of homes of about 375,000.
The Wright Express Construction FCI for June 2012 is available at http://www.wrightexpress.com/fci.
About Wright Express
Wright Express 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 operations include Wright Express Financial Services, Pacific Pride, rapid! PayCard, Wright Express Prepaid Cards Australia, Wright Express Fuel Cards Australia and CorporatePay Limited, England. Wright Express and its subsidiaries employ more than 900 associates in six countries. For more information about Wright Express, please visit wrightexpress.com.
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Source: Wright Express Corporation
Wright Express Corporation
Jessica Roy, 207-523-6763