U.S. construction industry fueling down 3.4 percent year-over-year
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 16 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 January 2012 was 0.898 for the number of new single-family homes for sales and 0.878 for total construction put-in-place.
|New Single-Family Homes for Sale||0.898|
|Total Construction Put-in-Place||0.878|
|New Single-Family Homes for Sale – Under Construction||0.871|
|Total Private Housing Under Construction||0.840|
|S&P/Case-Shiller Home Price Index – Composite 20 Index||0.833|
|Average Sales Price of Existing Single-Family Homes Sold||0.822|
|Residential Construction Put-in-Place||0.741|
|New Single-Family Homes Sold – Completed||0.716|
|Average Sales Price of New Single-Family Homes Sold||0.702|
|Total Housing Completions, Private||0.697|
|Median Sales Price of New Single-Family Homes Sold||0.657|
|New Single-Family Homes Sold||0.497|
|Housing Permits, Private||0.471|
|Total Private Housing Starts||0.466|
|Nonresidential Construction Put-in-Place||0.448|
|New Single-Family Homes Sold – Under Construction||0.262|
Source: Wright Express