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Expansion Index - August 2017


Explanation:

For metropolitan statistical areas (MSAs) across the U.S., the expansion index measures the dollar volume of projects (i.e., in ConstructConnect's extensive database) in all stages of preparation prior to construction field-work getting underway, at the beginning of any given month this year versus what was calculated at the same time last year. Expressed a little differently, it is the value of all the projects in the pipeline prior to groundbreakings or 'starts' now versus 12 months ago.

The types of structure covered are high-rise residential, non-res building and civil/heavy engineering. Blue dots represent values of 1.0 or less and they indicate market potential that is flat or declining. Yellow dots record values above 1.0 but less than 3.0, where market potential is increasing. Red dots are for values of 3.0 or more, where dollar volume potential is now considerably greater than last year.


Blue dots represent values of 1.0 or less and they indicate market potential that is flat or declining.
Yellow dots represent values above 1.0 but less than 3.0, where market potential is increasing.
Red dots are for values of 3.0 or more, where dollar volume potential is now considerably greater than last year.

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Commentary:

ConstructConnect's Expansion Index heat map for August 2017 is about two-thirds warm (i.e., yellow or red) to one-third cool (i.e., blue).

121 of the 378 MSAs (or 32%) have index values of 1.0 or lower, but 235 (or 62%) have index values between 1.0 and 3.0, indicating that the volume of projects in the contemplated and preparing plans stages is greater now than at the same time last year. And 22 MSAs (or 6%) have Expansion Index values of 3.0 or more, suggesting dollar volume market potential, year over year, that is 'red hot'. Last month, the corresponding figures for blue, yellow and red were 105 (28%), 248 (65%) and 25 (7%) respectively.

For the entire U.S., while the August Expansion Index figure remains solidly positive at 1.35, it has stepped back slightly from July's 1.40.

Alex Carrick, Chief Economist