Determinant of near-term diesel futures
Prices for construction inputs have shown mixed patterns since the PPI data were collected in mid-November. The Energy Information Administration reported that the average retail price of on-highway diesel fuel fell 14 cents in the previous four weeks. The price of Brent crude futures, a major determinant of near-term diesel futures, has fallen an additional $6 per barrel (14 cents per gallon) in the past week. But contractors have forwarded to AGC copies of letters from suppliers announcing increases for ready-mix concrete (D.C. area, effective January 1, received November 26) and "12% on all clear tempered glass as well as a 5% increase in the cost of fabrication" (Denver area, received December 11). Readers are invited to send reports of price increases or decreases to AGC Chief Economist Ken Simonson at simonsonk@agc.org. On November 24, investment analyst Thompson Research Group wrote, "we see pricing momentum building [for aggregate] as we head into 2015, including in many markets that have yet to see any meaningful increase since the downturn....In addition, $10-$20/ton cement prices are being implemented in the cement industry in early 2015."
The value of nonresidential construction starts rose 4.9% from November 2013 to November 2014 and 7.4% year-to-date for the first 11 months of 2014 combined compared with the same period last year, CMD (formerly Reed Construction Data) reported on Thursday, based on data it collected. Nonresidential building starts increased 6.9% year-over-year and 5.9% year-to-date; institutional buildings increased 17% and 8.4%, respectively, while commercial building starts plunged 16% year-over-year but increased 2.8% year-to-date. Heavy engineering starts climbed 1.8% and 9.9%, led by increases of 9.0% and 17% for road/highway construction.
Seasonally adjusted results from Manpower Group's latest survey of 18,000 U.S. employers, released on Tuesday, "suggest that employers expect hiring intentions to remain relatively stable during Quarter 1 2015 compared to Quarter 4 2014 and to slightly increase compared to one year ago at this time....employers have a positive outlook in all 13 industry sectors included in the survey...When the industry sector data is compared quarter-over-quarter, employers in the [construction sector] expect the hiring pace to slightly increase....Among Midwest employers, [a] considerable increase is anticipated among employers in the construction [sector. In the West,] construction employers plan to moderately decrease hiring," whereas construction employers in the Northeast and South expect to moderately increase hiring. Combining responses from all sectors, "all 100 of the largest Metropolitan Statistical Areas (MSA) in the United States report positive Net Employment Outlooks," led by Cape Coral, Fla.; McAllen, Texas; Deltona, Fla. and Grand Rapids, Mich.