Construction loadings rebound 1.2% in April
June 14, 2012
Movements of construction goods came in right on our expectation for April and the outlook is essentially unchanged from last month. Loadings were at 9.218 million in April, up 1.2% from the prior month after recording a 2.0% drop in March. The year-over-year growth remains strong, up 6.4% in April. We expect it to stay strong throughout the year.
After a period of stability during the middle of 2011, growth has resumed since the end of the year. Aside from a quick 2-month period of no growth, year-over-year growth has been very strong since turning positive in the middle of 2010. October and November of 2011 showed an anomaly of negative growth as we had both strong growth in those months during 2010 and weak months during 2011. Despite the relatively weak outlook for so many construction sectors (housing, infrastructure, etc.), it is coming off of such a historic low that the growth looks quite positive.
Improvements in housing conditions remains spotty, but the upward trend is clearly noticeable. The improvement is not nearly enough to make a significant dent in the deep hole that it has been in.
Loadings dropped throughout 2008 and 2009 and didn’t hit bottom until 2009Q4. It rebounded strongly starting in Q2 of 2010. Loadings fell 4.4% in 2007, 8.4% in 2008 and 19.6% in 2009. The decline in 2009 was shocking because this sector had already been through 2 years of significant declines. On an annual basis 2010 loadings were only up 1.1%, but 2011 saw a gain of 5.5%. Volumes have been trending higher since November 2011.
We expect growth to remain on track in 2012 with annual growth above 6%. The current growth is strong but volumes will remain well below the last peak. We look for growth to remain above 5% in 2013 and 2014, growing 5.2% and 5.4%, respectively.
Construction Goods are movements of products generally used in residential, business or infrastructure construction. This includes such items as lumber/wood, structural components, furniture, roofing, and gypsum. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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