WEX Inc. (NYSE: WEX), a leading provider of corporate payment solutions, in collaboration with IHS, Inc., the leading global source of critical information and insight, today released results of its WEX Construction Fuel Consumption Index (FCI), which indicated an increase of 2.5% in June versus its level at the same time the previous year. The WEX 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. WEX worked with IHS to capture and analyze transaction data from its closed loop network, which includes over 90 percent of the domestic retail fuel locations. With this data, the WEX Construction FCI can be used to identify emerging trends within the construction industry and the national economy. 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 June 2013, the WEX Construction FCI reported that fuel consumption by U.S. construction companies increased 2.5% versus June 2012 and decreased 0.5% versus the previous month. The WEX Construction FCI, which is available monthly in advance of the U.S. Census Bureau figures on construction spending, is available at http://www.wexinc.com/fuel-consumption-index. Last month’s WEX Construction FCI reflected the upward trend for the index, and additional government data releases were generally in line with the 0.7% increase indicated by the seasonally-adjusted index in May. Private residential construction increased by 0.7% in May and construction spending excluding improvements – a good measure of activity – grew by 0.3% in the same period. Housing starts jumped in May by 6.8% to an annual rate of 914,000; however, housing permits slipped by 3.1% to an annual rate of 974,000, which reflects a setback since reaching a five-year high in April. Total construction put-in-place, which is released a month later than the WEX Construction FCI, increased by 0.5% in May. The total employment report was positive with an increase of 195,000 jobs, and the construction industry gained 13,000 jobs, which was better than expected. This indicated that the private sector is largely shrugging off the federal government spending sequester.
IHS AnalysisAccording to the IHS analysis, despite the month-to-month decrease in June for the WEX Construction FCI, the housing market has been showing signs of improvement. New home sales increased by 2.1% in May to a 476,000-unit annual rate. Meanwhile, existing home sales rose 4.2% in May and total inventory increased by 3.3%, which is a sign that rising home prices are bringing more homes onto the market, but inventory remains extremely lean. Home prices continue to rise as a result of these lean inventories, low interest rates, the growing economy, and the decreased share of distressed homes. These higher home prices, in turn, are bringing more builders into the market and boosting household wealth. Household real estate wealth increased by $2.5 trillion in the five quarters ending in the first quarter of 2013, according to the Flow of Funds report. A buildup of this size of household real estate wealth in such a short period is unprecedented. The recovery in housing would be even stronger were it not for the difficult lending requirements facing would-be buyers. Although rates remain low from a historical perspective, a recent uptick in mortgage rates has also placed some pressure on buyers. The WEX Construction FCI for June 2013 is available at http://www.wexinc.com/fuel-consumption-index About WEX Inc. WEX Inc. (NYSE: WEX) is a leading provider of corporate payment solutions. From its roots in fleet card payments beginning in 1983, WEX has expanded the scope of its business into a multi-channel provider of corporate payment solutions representing more than 7.5 million cardholders and offering exceptional payment security and control across a wide spectrum of business sectors. The Company’s operations include WEX Bank, Fleet One, Pacific Pride, rapid! PayCard, Wright Express Australia, Wright Express New Zealand and CorporatePay Limited, England, as well as a majority equity position in UNIK S.A., Brazil. WEX and its subsidiaries employ more than 1,300 associates. For more information about WEX, please visit WEXInc.com.