Wright Express Corporation (NYSE: WXS), a leading global provider of value-based business payment processing and information management solutions, in collaboration with IHS (NYSE: IHS), a leading provider of global economic and financial intelligence, has released results of its Wright Express Construction Fuel Consumption Index (FCI), which indicated an increase of 0.9% on an annual basis in October.
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% 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 October 2011 data suggests the construction industry is slowly inching forward on an annual basis," said Michael Dubyak, Wright Express Chairman and Chief Executive Officer. "The report also shows, in looking back to September, an increase in private construction by 0.6%, and a possibility that rebuilding after Hurricane Irene is what gave construction employment a temporary boost in September.”
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 October 2011, the Wright Express Construction FCI reported that fuel consumption by U.S. construction companies rose by 0.9% versus October 2010, and declined by 1.8% versus the previous month.
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 www.wrightexpress.com/fci.
October 2011 Wright Express Construction Fuel Consumption Index (FCI)
According to the Wright Express Construction FCI, the construction industry is in neutral, which will take some time to recover. Despite experiencing a month-to-month decline, the index (Table 1) increased 0.9% on an annual basis in October, and consistent annual growth provides a glimmer of hope.
According to IHS’s analysis, the October result reflects the state of the stalled construction industry. Throughout 2011, small monthly gains have been offset by subsequent losses, while the construction industry slowly inches forward on an annual basis. After two consecutive month-to-month declines in the seasonally adjusted index, it is evident that growth in the construction industry is not yet ready to take off. Construction spending is expected to pick up somewhat in 2012, with more substantial gains coming in 2013 when housing returns. Pent-up demand for housing is building as young adults stay at home, and at some point will spark a major revival in housing activity.