PPI jumps in February; contractors are optimistic on hiring and activity, two surveys say
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The producer price index (PPI) for finished goods rose 0.8%, not seasonally adjusted (0.7%, seasonally adjusted), in February and 1.7% over 12 months, the Bureau of Labor Statistics reported on Thursday. The PPI for inputs to construction—a weighted average of the cost of all materials used in construction plus items consumed by contractors such as diesel fuel—increased 1.3% for the month and 2.0% year-over-year, outpacing the PPIs for most new nonresidential building construction and subcontractors’ work. The PPI for new offices was flat in February and rose just 1.0% over 12 months; new industrial buildings, 0% and 1.3%, respectively; schools, 0.3% and 1.2%; and warehouses, -0.3% and 2.6%. The new PPI for health care buildings, which dates only to June 2012, was unchanged in February. The PPI for new, repair and maintenance work on nonresidential buildings by electrical contractors fell 0.3 % in February and 0.4% over 12 months; the index for plumbing contractors fell 0.1% for the month but increased 1.6% from a year ago; the index for roofing contractors rose 0.1% and 2.2%, respectively; and concrete contractors, 0.5% and 1.2%. As for input costs, materials used mainly in building construction again rose steeply, reflecting the pickup in residential construction and retail and office renovations. The PPI for gypsum products jumped 4.4% in February and 18% from a year ago; lumber and plywood, 2.3% and 16%; and insulation materials, 2.1% and 5.9%. The PPI for diesel fuel soared 7.2% for the month but only 3.8% year-over-year. Metals prices were mixed for the month but lower than a year ago: copper and brass mill shapes, 0.7% and -2.1%; aluminum mill shapes, 0.6% and -1.5%; and steel mill products -0.9% and -9.7%. The PPI for concrete products rose 0.3% in February and 2.3% for the year, while the index for asphalt paving mixtures and blocks fell 0.1% in February and rose 1.1% over 12 months.
“Survey results suggest that employers expect hiring intentions to remain relatively stable during Quarter 2 2013 compared to Quarter 1 2013 and compared to one year ago at this time,” ManpowerGroup reported on Tuesday in releasing its latest survey of 18,000 employers in all 50 states, the District of Columbia and Puerto Rico. “Employers have a positive outlook in all 13 industry sectors included in the survey.” Construction employers had the biggest swing in sentiment, to a net employment outlook (the percentage of industry respondents who anticipate an increase in employment in the next quarter minus the percentage who anticipate a decrease) of +10 from -2 in the previous survey.
“Construction contractors and equipment distributors are optimistic that local nonresidential construction activity will improve in 2013,” Wells Fargo Equipment Finance, Inc., reported on March 6, based on a survey it conducted January 3-18. Of the 347 construction contractors, equipment distributors and manufacturers and industry service suppliers who responded, 41% said they expect local nonresidential construction activity to increase from 2012 to 2013, vs. 9% who expect a decrease. There was a similar but slightly more positive 47%-8% split regarding the outlook for residential activity. “The longstanding trend for construction equipment distributors to be more optimistic than construction contractors holds true once again for 2013. [The] gap between contractors and distributors for the 2013 survey is the third largest disparity in our recent history of surveys….Sentiment among U.S. contractors is that purchases of new construction equipment in 2013 will remain similar to, if not down slightly, compared to the volume of equipment they purchased in 2012. The percentage of executives who said they would increase buying activity was more than offset by the percentage that expect to decrease new equipment acquisition.”
Midland, Texas, was the fastest-growing metro area from July 1, 2011, to July 1, 2012, increasing 4.6%, the Census Bureau reported on Thursday. “Adjacent Odessa, Texas, ranked fifth overall, Austin-Round Rock, Texas, was seventh, while two areas in Wyoming (Casper and Cheyenne), along with Manhattan, Kan., and Bismarck, N.D., were also among the 20 fastest-growing metropolitan areas. ‘After a long period of out-migration, some parts of the Great Plains—from just south of the Canadian border all the way down to West Texas—are experiencing rapid population growth,’ said [Census’s] Thomas Mesenbourg….‘no doubt the energy boom is playing a role. For instance, the Permian Basin, located primarily in West Texas, and North Dakota accounted for almost half of the total U.S. growth in firms that mine or extract oil and gas, during a recent one-year period.’ Micropolitan areas, which contain an urban cluster of between 10,000 and 49,999 people, followed a similar pattern, with those located in or near the Great Plains among the fastest-growing. Williston, N.D., ranked first in growth (9.3%), followed by Junction City, Kan.; Dickinson, N.D.; and Andrews, Texas. Three areas in western Oklahoma (Elk City, Weatherford and Woodward), as well as Gillette, Wyo., also made the top 20. The situation for counties was also much the same, with Williams, N.D.; Geary, Kan.; Richland, Mont.; and Stark, N.D., each among the five fastest-growing counties with populations of 10,000 or more. These are just a few examples of the plethora of counties in or near the Great Plains that appear on the list of fastest-growing counties….Texas had 11 counties among the 50 fastest-growing….The county with the fastest decline in population was Bradford, Fla., at 5%,” followed by Hendry, Florida, and Macon and Perry, Ala.
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