Market Update
January 2017
Total housing starts were reported at a seasonally adjusted annual rate of 1,135,000 for the month of December, on a 3MMA basis, down 6.7% from the November rate.
Square foot starts present a non-residential construction (NRC), market that was down in December on both 3 month y/y (-3.7%) and 12 month y/y (-6.7%) metrics, (Table 1
January US starts posted $189.9 Bn, down 9.7%, 12 months y/y. On a 3 month year on year basis starts rose 7.7%, pushing momentum to a positive 17.5%.
At Gerdau we follow the ABI because it is a leading economic indicator that offers a glimpse into the future of non-residential construction spending of approximately 12 months. The national ABI jumped 5.3 points in December to 55.9.
In December net job creation was 156,000 which was down from 204,000 in November. October was revised down by 7,000 and November up by 46,000. Using a three month moving average, (3MMA), the result for December was 165,000 down from 182,000 in November.
We monitor and report on Portland cement shipments because it is an excellent proxy for rebar consumption as well as a good indicator of the current status of the construction market.