U.S. Construction Industry Fueling Increased 2.3% Year-Over-Year in
July, Down 0.02% versus Previous Month
SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Aug. 27, 2013--
WEX
Inc. (NYSE: WEX), a leading provider of corporate payment solutions,
in collaboration with IHS, Inc., the leading global source of critical
information and insight, today released results of its WEX Construction
Fuel Consumption Index (FCI), which indicated an increase of 2.3% in
July versus its level at the same time the previous year.
The WEX 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.
WEX worked with IHS to capture and analyze transaction data from its
closed loop network, which includes over 90 percent of domestic retail
fuel locations. With this data, the WEX 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 July 2013, the WEX Construction FCI
reported that fuel consumption by U.S. construction companies increased
2.3% versus July 2012 and decreased 0.02% versus the previous month.
The WEX Construction FCI, which is available monthly in advance of the
U.S. Census Bureau figures on construction spending, is available at http://www.wexinc.com/fuel-consumption-index.
Last month’s WEX Construction FCI reflected the consecutive
year-over-year increase for the index with an upsurge during nine of the
last ten months, and additional government data releases were generally
in line with the 0.5% decrease indicated by the seasonally-adjusted
index in June. Private residential construction decreased by 1.2% in
June and construction spending, excluding improvements – a good measure
of activity – also fell in the same period by 1.0%. Meanwhile, housing
starts dropped in June by 9.9% to an annual rate of 836,000, which was
possibly hampered by poor weather conditions, and housing permits fell
by 7.5% to an annual rate of 911,000, which reflected that builders were
still dealing with a backlog of permits after the surge in April. Total
construction put-in-place – released a month later than the WEX
Construction FCI – decreased by 0.6% in June. While the total employment
report for the country had an increase of 162,000 jobs, construction
employment showed little change in July.
IHS Analysis
According to the IHS analysis, despite the lack of growth in July for
the WEX Construction FCI, the housing market has been showing signs of
improvement. New home sales increased by 8.3% in June to a 497,000-unit
annual rate, which is a five-year high. However, existing home sales
fell by 1.2% in June as a result of prices being pushed higher by tight
inventories and a lower share of distressed sales. The supply of
single-family homes in June inched up, but it remains near historical
lows. Tight inventories are the main force that are holding sales back,
therefore, as rising prices coax more homeowners into the marketplace,
sales should pick up.
Underwater mortgages, where owners can’t readily sell their homes, are
part of the reason inventory is so constricted; however, as prices
increase, more properties rise above the “water line”. In turn, rising
mortgage rates have primarily affected refinancing, not purchases. Data
on loan applications show that since rates started rising in April, the
volume of refinancing applications has tumbled, but the amount of
purchase applications has held steady. Loan demand is still strong, but
some of that demand goes unsatisfied due to inaccessible credit.
Additionally, standards are still very high, which makes it difficult
for those with lower credit scores to obtain a mortgage.
The WEX Construction FCI for July 2013 is available at http://www.wexinc.com/fuel-consumption-index
About WEX Inc.
WEX Inc. (NYSE: WEX) is a leading provider of corporate payment
solutions. From its roots in fleet card payments beginning in 1983, WEX
has expanded the scope of its business into a multi-channel provider of
corporate payment solutions representing more than 7.4 million
cardholders and offering exceptional payment security and control across
a wide spectrum of business sectors. The Company’s operations include
WEX Bank, Fleet One, Pacific Pride, rapid! PayCard, Wright Express
Australia, Wright Express New Zealand and CorporatePay Limited, England,
as well as a majority equity position in UNIK S.A., Brazil. WEX and its
subsidiaries employ more than 1,400 associates. For more information
about WEX, please visit www.wexinc.com.
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Source: WEX Inc.
News media contact:
WEX Inc.
Jessica Roy, 207-523-6763
Jessica.Roy@wexinc.com