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Latest industry statistics
USA Rig Count (by Baker Hughes)
  • The US Rig Count for last week was 924 DOWN 5 from the prior week of 929 and a year ago was 665
  • Drilling for Oil 742 prior week 747 year ago 529
  • Drilling for Natural Gas 182 prior week 182, year ago 135
  • The Rocky Mountain Rig Count for last week was 117 prior week total was 116 a year ago was 84
  • The Appalachian Region Rig Count for last week was 79 prior week total was 79, a year ago was 61
  • South Texas Region (w/ Eagle Ford Shale) Rig Count for last week was 77 prior week total was 77, a year ago was 57

Offshore Utilization Rate
  • (IHS-Petrodata) The offshore rig marketed utilization rate in the US Gulf of Mexico last week was 64.8% prior week was 63.6%, year ago was 75.5%
  • Gulf of Mexico: Total Supply 93 Marketed Supply 54, Marketed Contracted 35
  • The offshore rig marketed utilization rate Worldwide last week was 71.4% prior week was 71.6%, year ago was 68.3%
  • Worldwide: Total Supply 801 Marketed Supply 661, Marketed Contracted 472

 
Drilling Permits
  • (RigData) Total drilling permits filed in the USA in December was 4,983 permits, prior month total was 3,996, same month year ago was 2,827
  • Tracking Prior 12 months > December 4,983, November 3,996, October 3,929, September 4,802, August 3.409, July 3,420, June 4,441, May 3,247, April 2,757, March 4,025, February 3,281, January 2,596
  • Year-to-date > December 2017 = 44,886, December 2016 = 28,323, December 2015 = 44,883, December 2014 = 76,393, December 2013 = 69,708
  • Year-by-year > 2010 = 66,013, 2011 = 70,251, 2012 = 69,408, 2013 = 69,708, 2014 = 74,615, 2015 = 44,883, 2016 = 28,323,  2017 = 44,886
Natural Gas
(Bloomberg News) Ended week at $2.80 prior week ended at $3.06 year ago was $3.19

Crude Oil                                                                                                                                     
(Bloomberg News) Ended week at $61.44 prior week ended at $60.37 year ago was $53.02

           

                 
                                        
Gasoline Pricing $/gallon (AAA Texas)  
 

Steel Output - USA
  • (AISI) Steel Output for the USA Year to date is 88,469,000 tons, Year ago to date was 84,772,000 tons.
  • Capability Utilization Year to date is 74.4%, compared to Year Ago to date of 70.5%.
   2016 =   87,972,000 tons, 70.8% capability utilization
   2015 =   88,419,000 tons, 70.1% capability utilization
   2014 =   95,706,000 tons, 77.5% capability utilization
   2013 =   94,809,000 tons, 76.8% capability utilization
   2012 =   97,227,000 tons, 75.7% capability utilization
   2011 =   95,594,000 tons, 74.7% capability utilization
   2010 =   88,569,000 tons, 70.4% capability utilization
   2009 =   63,173,000 tons, 51.5% capability utilization
   2008 = 100,319,000 tons, 82.1% capability utilization
   2007 = 106,473,000 tons, 86.1% capability utilization                       
   2006 = 108,253,000 tons, 87.5% capability utilization
   2005 = 102,524,000 tons, 85.0% capability utilization
   2004 = 109,879,000 tons, 94.6% capability utilization
 
Scrap Iron Consumer Buying Price - Chicago #1 Busheling
(Steel Markets) Current price  $365/ton as of 01-08-17 UP f rom $345/ton as of 12-07-17
 
Prior changes:  
2017 = High $370/ton on 03-07-17, Low $305/ton on 02-08-17,  End $345/ton on 12-07-17
2016 = High $275/ton on 05-06-16, Low $180/ton on 01-01-16, End $275/ton on 12-08-16
2015 = High $355/ton on 01-08-15, Low $160/ton on 11-06-15,  End $160/ton on 12-07-15
2014 = High $440/ton on 01-10-14, Low $349/ton on 11-07-14, End $351/ton on 12-05-14
2013 = High $430/ton on 11-12-13, Low $380/ton on 05-03-13, End $430/ton on 12-12-13
2012 = High $520/ton on 01-09-12, Low $337/ton on 07-10-12, End $390/ton on 12-06-12
2011 = High $515/ton on 07-08-11, Low $434/ton on 01-07-11, End $500/ton on 12-07-12
2010 = High $480/ton on 04-08-11, Low $390/ton on 11-03-10, End $440/ton on 12-07-10
2009 = High $345/ton on 12-07-09, Low $170/ton on 04-16-09, End $345/ton on 12-07-09
2008 = High $890/ton on 07-17-08, Low $125/ton on 11-06-08, End $260/ton on 12-04-08
2007 = High $370/ton on 04-02-07, Low $265/ton on 01-08-07, End $340/ton on 12-10-07
2006 = High $345/ton on 06-14-06, Low $220/ton on 11-09-06, End $235/ton on 12-07-06
2005 = High $370/ton on 01-04-05, Low $140/ton on 06-03-05, End $280/ton on 12-01-05
2004 = High $430/ton on 11-08-04, Low $265/ton on 04-21-04, End $390/ton on 12-08-04

MONTHLY PIPE & STEEL MARKET ANALYSIS & INSIGHTS 
Pipe Logix Line Pipe Report - Decemberr 2017
(by Kurt Minnich, www.pipe-logix.com) Line pipe prices are slightly higher in December. There is no net change in domestic prices but a 0.5% increase to import prices. Domestic prices have been mostly steady since August while import prices have trended higher, up 4% since August. Distributor's sentiment became more positive this month with the NASPD Index at 58, suggesting a modestly expanding market. Most distributors expect prices to increase in the near-term with little change to inventory. Reported import volumes were over 250,000 tons in October but the final trade numbers are expected to be significantly lower in November. The Baker Hughes rig count is averaging 930 active rigs this month, a 2% gain from the previous month and ending a four-month trend of lower rig counts.
 
Preston Pipe Report - The Line Pipe Market November 2017
(by Paul Vivian and Rick Preckel,  www.prestonpipe.com ) Market Monitor: In total, line pipe shipments in 2017 are expected to exceed the 2016 level by just under a million tons with 80% of the growth in the 0-16" segment. In the standard pipe section, we discuss the price relationship that resulted in imports destined for standard pipe applications brought in as line pipe in 2016. The balance of the growth was related to stronger upstream activity and inventory build. 16" and Under Diameters: Slightly higher drilling overall in 2018 should keep gathering related line pipe demand relatively flat to slightly up when compared to 2017. We expect 2017 0-16" shipments to end up at about 1.7 million tons which includes some inventory build. In 2018, we are forecasting small diameter shipments of 1.6 million tons. This still represents some inventory build we believe but shipments will be more in line with consumption. Absent any 232 action, we expect the source of supply mix to remain relatively unchanged. Greater than 16" Outside Diameter: Large OD shipments in 2017 are expected to end up at about 2.2 million tons. Modest growth in project business will push this number up by about 200k tons in 2018 to 2.4 million tons. As we noted last month, projects have shifted towards natural gas. While protests over pipeline projects are continuing to increase in frequency, the regulatory process is becoming just a bit easier. While the Trump administration has struggled to complete the big ticket items they campaigned on, regulation reform has been one quiet area that has moved forward.
 
Zekelman Industries Steel Snapshot for December 2017
(by Mike Mechley, Executive VP of Strategic Procurement,  www.ZekelmanIndustries.com ) Platts Dec HR Coil is $640, up $25 from Nov. Nucor raised prices an additional $30 last week all mills have followed this increase. HR and CR announced increases in the last two months are up a minimum of $100 a ton. Imports shipments continue to be weak. World prices remain very strong. Scrap forecasted to be up $20 in January. HR lead time 4-7 weeks, CR lead time 5-8 weeks. US Mills capacity utilization rate is 71%. Platts Dec CR Coil is $824, up $20 from Nov. Zinc is currently $1.43lb. Inventories remain low. Dec Chicago #1 Bush $345 up $20 from Nov. $1 U.S. Dollar = $1.29 Canadian Dollar.

AISI - Press Release on Latest U.S. Imports of Steel Products
(American Iron and Steel Institute,  www.steel.org  - October 4, 2017) Based on the Commerce Department's most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reported today that steel import permit applications for the month of September totaled 3,026,000 net tons (NT)*. This was a 15.7% decrease from the 3,591,000 permit tons recorded in August and a 9.6% decrease from the August preliminary imports total of 3,349,000 NT. Import permit tonnage for finished steel in September was 2,377,000, down 1.9% from the preliminary imports total of 2,422,000 in August. For the first nine months of 2017 (including September SIMA permits and August preliminary data), total and finished steel imports were 29,587,000 NT and 22,778,000 NT, up 19.3% and 15.1%, respectively, from the same period in 2016. The estimated finished steel import market share in September was 26% and is 27% year-to-date (YTD). Finished steel imports with large increases in September permits vs. the August preliminary included light shapes bars (up 185%), standard rails (up 140%), hot rolled bars (up 34%), oil country goods (up 21%), tin plate (up 16%) and line pipe (up 12%). Products with significant year-to date (YTD) increases vs. the same period in 2016 include oil country goods (up 254%), line pipe (up 55%), standard pipe (up 45%), mechanical tubing (up 32%), cold rolled sheets (up 28%), sheets and strip all other metallic coatings (up 27%), structural pipe and tubing (up 22%), sheets and strip hot dipped galvanized (up 21%) and hot rolled bars (up 21%). In September, the largest finished steel import permit applications for offshore countries were for South Korea (343,000 NT, down 2% from August preliminary), Japan (158,000 NT, up 24%), Germany (139,000 NT, up 41%), Taiwan (134,000 NT, up 11%) and Brazil (98,000 NT, up 21%). Through the first nine months of 2017, the largest offshore suppliers were South Korea (2,963,000 NT, down 1% from the same period in 2016), Turkey (1,919,000 NT, up 4%) and Japan (1,224,000 NT, down 15%).

HEADLINES OF INTEREST FROM THE OIL PATCH

INDUSTRY GET TOGETHERS 
 
NASPD (National Association of Steel Pipe Distributors) 
Annual Convention - February 15th - 17th, 2018
The NASPD 2018 Annual Convention will be held February 15th - 17th at The Westin Galleria Houston, 5060 W Alabama Street, Houston, Texas 77056
For details on the program speakers, attendees, or to register to attend, check out the web site at  www.naspd.com  
Speakers Presentations and attendee listing from the recently held NASPD Fall Conference in Philadelphia, Pennsylvania > http://www.naspd.com
 
NAPCA (National Association of Pipe Coating Applicators)  
54th Annual Convention  April 2018
The NAPCA Annual Convention will be held April 18th - 21st, 2018 at the Westin La Paloma Resort & Spa, Tucson, Arizona
For details on the program speakers, attendees, or to register to attend, check out the web site at www.napca.com  
Speakers presentations from the 53rd Annual NAPCA Annual Convention (April 19th - 22nd, 2017) can be obtained from the NAPCA web site at  www.napca.com
 
NAPCA (National Association of Pipe Coating Applicators) Summer Workshop
Speakers presentations from the NAPCA Summer Workshop ( August 17, 2017) can be obtained from the NAPCA web site at http://www.napca.com/conventions_workshops.cfm

NATURAL GAS WEEKLY UPDATE
In the News (EIA):
 
Below normal temperatures last week increased natural gas consumption:
Between December 24, 2017, and January 3, 2018, daily temperatures in the Lower 48 states averaged 27° Fahrenheit (F), which was 9°F lower than the 30-year (1981-2010) average for the same period. Daily temperatures reached a maximum departure from normal of 18°F below normal on January 1, 2018. By comparison, in the winter 2013-14, which had very cold temperatures as a result of several polar vortexes, the national average maximum departure from normal was 16°F below normal on January 7, 2014. National Oceanic and Atmospheric Administration forecasts the colder-than-normal weather to persist through January 7, 2018. Estimated total natural gas consumption posted a new single-day record on January 1, 2018, topping the previous record set on January 7, 2014. Total estimated consumption provided by PointLogic, which includes power burn, industrial, residential/commercial, and pipeline and liquefied natural gas (LNG) feedstock gas, reached 150.7 Bcf on January 1, compared with the previous high of 143.3 Bcf set in 2014. PointLogic's estimated residential and commercial use of natural gas spiked to 73.3 billion cubic feet (Bcf) on New Year's Day. This appears to be the largest daily residential and commercial consumption of natural gas since January 7 and 28, 2014. However, residential and commercial consumption may not have actually posted new record levels on New Year's day, but increased exports of natural gas to Mexico and LNG feedstock gas, which did not occur in 2014, significantly contributed to this week's apparent record U.S. load. Some regional natural gas prices were affected by the weather. Prices for December 29, 2017, delivery reached $64.49 per million British thermal units ($/MMBtu) at the Northern Natural Ventura trading hub in Hancock County, Iowa, on news of a critical day notice from Northern Natural Gas. This price exceeded the previous record of $55.62/MMBtu for January 28, 2014 delivery. Statewide average temperatures in Iowa were 20°F degrees below normal for the period from December 24, 2017 to January 3, 2018-the largest departure from normal in the Lower 48 states for the same time period. Prices at the Algonquin City gate and Transco Zone 6 NY trading hubs, the hubs that serve the greater Boston and New York City markets, were higher than $30.00/MMBtu.
 
Overview:
Natural gas spot prices rose at most locations this report week (Wednesday, December 27 to Wednesday, January 3) as cold weather affected much of the country. The Henry Hub spot price rose from $2.75 per million British thermal units (MMBtu) last Wednesday to $6.88/MMBtu yesterday. At the New York Mercantile Exchange (Nymex), the January 2018 contract expired last Wednesday at $3.008/MMBtu. The February 2018 contract price increased 28¢ Wednesday to Wednesday, closing at $3.008/MMBtu yesterday. Net withdrawals from working gas totaled 206 billion cubic feet (Bcf) for the week ending December 29. Working natural gas stocks are 3,126 Bcf, which is 6% less than the year-ago level and 6% lower than the five-year (2012-16) average for this week. The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 12¢, averaging $8.49/MMBtu for the week ending January 3. The price of natural gasoline, ethane, propane, and isobutane rose by 1%, 8%, 1%, and 2%, respectively. The price of butane fell by 2%. According to Baker Hughes, for the week ending Tuesday, December 26, the natural gas rig count decreased by 2 to 182. The number of oil-directed rigs remained constant at 747. The total rig count decreased by 2, and it now stands at 929.
 
Prices/Supply/Demand:
Prices rise across the country with cold weather. This report week (Wednesday, December 27 to Wednesday, January 3) saw extended cold temperatures across the East, South, and Central parts of the country. The Henry Hub spot price rose $4.13 from $2.75/MMBtu last Wednesday to $6.88/MMBtu yesterday. The major increase in Henry Hub prices occurred after the holiday weekend, when prices increased $3.04 from $3.58/MMBtu for natural gas delivery over the holiday weekend to $6.62/MMBtu on Tuesday. At the Chicago Citygate, prices increased $3.33 from $3.16/MMBtu last Wednesday to $6.49/MMBtu yesterday, after reaching a high of $9.01/MMBtu on Tuesday. Prices at PG&E Citygate in Northern California rose 19¢, up from $2.89/MMBtu last Wednesday to $3.08/MMBtu yesterday. The price at SoCal Citygate increased $2.99 from $3.16/MMBtu last Wednesday to $6.15/MMBtu yesterday. Although some of the maintenance on SoCal gas lines has been completed, some lines are still undergoing maintenance, according to SoCalGas. Northeast prices rise significantly. Prices in the Northeast rose as cold weather persisted and as the area anticipated the arrival of Winter Storm Grayson. At the Algonquin Citygate, which serves Boston-area consumers, prices went up $15.93 from $22.29/MMBtu last Wednesday to $38.22/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York, prices increased $31.84 from $16.54/MMBtu last Wednesday to $48.38/MMBtu yesterday. Tennessee Zone 4 Marcellus spot prices increased $3.54 from $2.21/MMBtu last Wednesday to $5.75/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania rose $3.52 from $2.34/MMBtu last Wednesday to $5.86/MMBtu yesterday. Nymex prices increase. At the Nymex, the January 2018 contract expired last Wednesday at $3.008/MMBtu. The February 2018 contract price increased 28¢ Wednesday to Wednesday, closing at $3.008/MMBtu yesterday. The price of the 12-month strip averaging February 2018 through January 2019 futures contracts increased 13¢, Wednesday to Wednesday, to $2.880/MMBtu. Supply falls slightly. According to data from PointLogic Energy, the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production decreased by 4% compared with the previous report week; well freeze-offs (when liquids in well piping freeze and block natural gas flows) were reported in some parts of the country. Average net imports from Canada increased by 32% from last week, as cold temperatures affected the Northeast and Midwest. Demand increases significantly. Total U.S. consumption of natural gas rose by 26% compared with the previous report week, as cold temperatures affected much of the country. Total U.S. consumption reached an all-time high on January 1, according to data from PointLogic Energy. Natural gas consumed for power generation climbed by 18% week over week. Industrial sector consumption increased by 8% week over week. In the residential and commercial sectors, consumption increased by 39%. Natural gas exports to Mexico decreased 5%. U.S. liquefied natural gas (LNG) exports are flat week over week. Four LNG vessels (LNG-carrying capacity 15.2 Bcf combined) departed the Sabine Pass liquefaction facility last week (Thursday to Wednesday) and one tanker (LNG-carrying capacity 3.8 Bcf) was loading at the terminal on Wednesday. According to Bloomberg, Sabine Pass finished 2017 with its highest monthly export total. In December, 25 tankers left the terminal, exceeding the previous monthly highs of 22 tankers in October and November. The Cove Point LNG export facility in Lusby, Maryland is continuing commissioning work with commercial operations anticipated early this year.
 
Storage:
Withdrawals from working gas were more than double the five-year average. Net withdrawals from storage totaled 206 Bcf for the week ending December 29, compared with the five-year (2012-16) average net withdrawal of 99 Bcf and last year's net withdrawals of 76 Bcf during the same week. Working gas stocks totaled 3,126 Bcf, which is 192 Bcf less than both the five-year average and last year at this time. Falling temperatures result in increased withdrawals of natural gas from storage. Colder weather throughout the Lower 48 states during the storage week resulted in increased consumption of natural gas. Substantial increases in natural gas consumption in the power, industrial, and residential/commercial sectors during this storage week resulted in withdrawals from storage in every region of the Lower 48 states. Storage withdrawals exceeded the five-year average rate in each of the storage regions. As a result of these broad-based withdrawals from storage, working gas stocks are now below the five-year average in all five regions in the Lower 48 states for the first time in 2017. The near-month futures contract trades at a discount to the current spot price. During the most recent storage week, the average natural gas spot price at the Henry Hub was $2.76/MMBtu, 2¢ higher than the front-month futures price at the Nymex. A year ago, the spot price was 10¢ lower than the front-month contract. The spot price for natural gas climbing above the futures price for natural gas provides economic incentives to withdraw natural gas from storage. Reported net implied flows out of storage were near the lower end of analysts' expectations, prices on the Nymex fall following the release of the Weekly Natural Gas Storage Report. According to the Desk survey of natural gas analysts, estimates of the weekly net change in working natural gas storage ranged from net withdrawals totaling 205 Bcf to 235 Bcf, with a median net withdrawal of 220 Bcf. Prices for the futures contract for February delivery fell about 2¢/MMBtu, averaging $3.02/MMBtu, at the release of the Weekly Natural Gas Storage Report, with 584 contracts traded. Prices exhibited considerable variation in subsequent trading falling to $2.98/MMBtu before climbing back above $3.00/MMBtu. Temperatures were lower than normal in most of the Lower 48 states during the storage week. Temperatures in the Lower 48 states averaged 32 degrees Fahrenheit (°F), 2°F lower than the normal and 10°F lower than last year at this time. Temperatures in the heavy natural gas-consuming areas of the Midwest and Northeast were significantly colder than normal, contributing to an increased demand for natural gas. Temperatures in the Mountain and South Central Census divisions were also colder than normal.

CRUDE OIL WEEKLY UPDATE 
Summary (EIA):
U.S. crude oil refinery inputs averaged 17.6 million barrels per day during the week ending December 29, 2017, 210,000 barrels per day more than the previous week's average. Refineries operated at 96.7% of their operable capacity last week. Gasoline production decreased last week, averaging 9.7 million barrels per day. Distillate fuel production increased last week, averaging 5.6 million barrels per day. U.S. crude oil imports averaged about 8.0 million barrels per day last week, down by 27,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.8 million barrels per day, 0.1% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 349,000 barrels per day. Distillate fuel imports averaged 129,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.4 million barrels from the previous week. At 424.5 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Total motor gasoline inventories increased by 4.8 million barrels last week, and are above the upper half of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories increased by 8.9 million barrels last week and are in the middle of the average range for this time of year. Propane/propylene inventories decreased by 0.7 million barrels last week, but are in the middle of the average range. Total commercial petroleum inventories increased by 1.2 million barrels last week. Total products supplied over the last four-week period averaged 20.6 million barrels per day, up by 5.0% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged about 9.2 million barrels per day, up by 2.1% from the same period last year. Distillate fuel product supplied averaged about 4.1 million barrels per day over the last four weeks, up by 5.8% from the same period last year. Jet fuel product supplied is up 14.7% compared to the same four-week period last year. The WTI price was $60.46 per barrel on December 29, 2017, $2.21 above last week's price and $6.71 over a year ago. The spot price for conventional gasoline in the New York Harbor was $1.829 per gallon, $0.038 more than last week's price and $0.107 higher than a year ago. The spot price for No. 2 heating oil in the New York Harbor was $1.993 per gallon, $0.109 over last week's price and $0.381 above a year ago. The national average retail regular gasoline price increased to $2.520 per gallon on January 1, 2018, $0.048 above last week's price and $0.143 more than a year ago. The national average retail diesel fuel price increased to $2.973 per gallon, $0.070 per gallon over last week and $0.387 above a year ago.
ECONOMIC MONTHLY SUMMARIES 

Architecture Billings IndexArchitecture Billings Index
(11-21-17) Following a brief dip in revenue in September, billings at US architecture firms advanced in October. AIA's Architecture Billings Index (ABI) was 51.7 for the month, up from a 49.1 reading the prior month. Through 10 months of the year, the ABI has posted gains in eight. Both project inquiries and new design contracts also were positive for the month. Additionally, both of these indictors have posted readings in excess of 50-signifying an increase over the prior month-each month this year. The growing number of inquiries for future projects, coupled with gains in new projects coming into architecture firms, point to future advances in design billings. Regional business trends at architecture firms are becoming a bit more unbalanced. While firms in the Northeast have reported strong gains in billings in recent months, firms in the Midwest reported modest declines in September and October, and firms in the West have been hovering around the no-growth zone for the past few months. Firms in the South saw weak gains in October but generally have been reporting solid monthly progress throughout the year. Economy remains healthy; tax reform implications still uncertain: The economy remained healthy in the third quarter, apparently largely unfazed by the recent hurricanes and wildfires. The 3 percent growth in GDP largely matched the performance of the second quarter, with the increase for the year likely to be in the 2 to 2.5 percent range. That would be well in excess of the 1.5 percent growth the economy saw in 2016. However, the third quarter gains did little to help the construction sector. Both business investment in structures, and investment in new and existing homes, were reported to have declined by over 5 percent (at an annualized rate) during the quarter. Early fourth quarter economic indicators are looking positive. Our economy added 261,000 payroll positions on net in October, offsetting the weak performance in September that was held back by natural disasters. The economy is on track to add over two million payroll jobs this year. Given that the national unemployment rate is currently just 4.1 percent-its lowest rate since late 2000-a tight labor market continues to be a major concern for future growth. Tax reform is emerging as the next big unknown for the economy. While the construction sector and related design activity are not currently a major focus of these proposals, certainly this large sector of the economy would be impacted by any major changes in the tax system. A reduction in the corporate tax rate of the magnitude proposed would likely increase business spending and investment, with spending on facilities likely to benefit from such a change. On the other hand, current tax reform proposals likely will reduce investment in the residential sector. A decline in the ability of homeowners to deduct mortgage interest or local property taxes would make owning a home more expensive for many households, particularly those with upper-end homes. Increasing the standard deduction also would reduce the potential benefit of these interest and property tax deductions. Firms expecting more growth next year; staffing seen as a key concern: On the whole, US architecture firms are reporting solid business conditions at their firms. As the year winds down, over half of firms are projecting revenue growth of at least 5 percent for the year, while fewer than a quarter are projecting a decline of 5 percent or more from 2016 levels. Average growth across all firms is estimated to be just over 5 percent for the year. Next year is projected to produce somewhat slower growth overall but still expected to be fairly positive, with growth across all firms estimated to average just under 3 percent. Almost half of firms expect revenue to grow by at least 5 percent next year, while 21 percent are projecting a decline of at least 5 percent. Given that almost half of firms expect fairly significant revenue growth next year, it's not surprising that a comparable share also expect to add staff to accommodate this growth. However, those firms expecting to add staff in 2018 are generally anticipating that to be a difficult proposition. Over 40 percent of firms think that it will be extremely difficult to add qualified architectural positions in 2018, and an additional 51 percent feel that it will be somewhat difficult. Facing difficulty in adding staff is not seen to be a short-term problem. Among all firms, even those not looking to add staff in the near term-over three-quarters feel that there may be shortages of architectural staff in their area over the next few years to handle the needs of firms looking to expand. This month, Work-on-the-Boards participants are saying: "Heading into the end of the year, we project steady work and multiple new project starts at a time we have historically expected work to taper off." 23-person firm in the South, mixed specialization "We are seeing smaller projects than in past years, so our operational approach will have to change in order to maintain profitability." 24-person firm in the Northeast, institutional specialization "The increase in contracts and inquiries is a direct response to the fire disaster in Sonoma County. Prior to that, I was going to stay small; I am now trying to hire." 2-person firm in the West, commercial/industrial specialization. "Business conditions are improving, with more access to capital available." 13-person firm in the Midwest, institutional specialization.

Conference Board - Consumer Confidence Index
(09-26-17) The Conference Board Consumer Confidence Index, which had improved marginally in August, declined slightly in September. The Index now stands at 119.8 (1985=100), down from 120.4 in August. The Present Situation Index decreased from 148.4 to 146.1, while the Expectations Index rose marginally from 101.7 last month to 102.2. The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was September 18. "Consumer confidence decreased slightly in September after a marginal improvement in August," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Confidence in Texas and Florida, however, decreased considerably, as these two states were the most severely impacted by Hurricanes Harvey and Irma. Despite the slight downtick in confidence, consumers' assessment of current conditions remains quite favorable and their expectations for the short-term suggest the economy will continue expanding at its current pace." Consumers' assessment of current conditions moderated in September. Those saying business conditions are "good" decreased slightly from 34.5 percent to 33.9 percent, while those saying business conditions are "bad" increased from 13.2 percent to 13.8 percent. Consumers' appraisal of the labor market was also somewhat less upbeat. Those stating jobs are "plentiful" declined from 34.4 percent to 32.6 percent, however, those claiming jobs are "hard to get" decreased marginally from 18.4 percent to 18.1 percent. Consumers' optimism about the short-term outlook was somewhat better in September. The percentage of consumers expecting business conditions to improve over the next six months rose slightly from 19.8 percent to 20.2 percent, but those expecting business conditions to worsen increased from 8.0 percent to 9.9 percent. Consumers' outlook for the labor market was more favorable than in August. The proportion expecting more jobs in the months ahead increased from 16.8 percent to 19.5 percent, while those anticipating fewer jobs rose marginally from 13.2 percent to 13.5 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased moderately from 19.9 percent to 20.5 percent, while the proportion expecting a decline was virtually unchanged at 8.3 percent.

Conference Board - Leading Economic Index
(11-20-17) The Conference Board Leading Economic Index® (LEI)for theU.S. increased 1.2 percent in October to 130.4 (2010 = 100), following a 0.1 percent increase in September, and a 0.4 percent increase in August. "The US LEI increased sharply in October, as the impact of the hurricanes dissipated," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. "The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year." The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in October to 116.2 (2010 = 100), following a 0.1 percent increase in September, and no change in August. The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in October to 125.5 (2010 = 100), following no change in September, and a 0.2 percent increase in August.

Durable Goods - Shipments and New Orders
(11-22-17)  New Orders: New orders for manufactured durable goods in October decreased $2.8 billion or 1.2 percent to $236.0 billion, the U.S. Census -bureau announced today. This decrease, down following two consecutive monthly increases, followed a 2.2 percent September increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders decreased 0.8 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.5 billion or 4.3 percent to $77.1 billion. Shipments: Shipments of manufactured durable goods in October, up five of the last six months, increased $0.3 billion or 0.1 percent to $241.0 billion. This followed a 1.0 percent September increase. Primary metals, up three of the last four months, led the increase, $0.3 billion or 1.5 percent to $19.9 billion. Unfilled Orders: Unfilled orders for manufactured durable goods in October, down three of the last four months, decreased $0.5 billion or virtually unchanged to $1,134.6 billion. This followed a 0.2 percent September increase. Inventories: Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $0.5 billion or 0.1 percent to $404.1 billion. This followed a 0.6 percent September increase. Primary metals, also up fifteen of the last sixteen months, led the increase, $0.1 billion or 0.4 percent to $33.9 billion. Capital Goods: Nondefense new orders for capital goods in October decreased $3.4 billion or 4.5 percent to $72.3 billion. Shipments decreased $1.4 billion or 1.9 percent to $72.4 billion. Unfilled orders decreased $0.1 billion or virtually unchanged to $705.2 billion. Inventories increased less than $0.1 billion or virtually unchanged to $179.7 billion. Defense new orders for capital goods in October decreased $1.1 billion or 9.6 percent to $9.9 billion. Shipments increased $0.3 billion or 2.4 percent to $10.9 billion. Unfilled orders decreased $0.9 billion or 0.7 percent to $142.3 billion. Inventories increased $0.2 billion or 1.0 percent to $23.6 billion. Revised September Data: Revised seasonally adjusted September figures for all manufacturing industries were: new orders, $479.1 billion (revised from $478.5 billion); shipments, $480.9 billion (revised from $480.4 billion); unfilled orders, $1,135.1 billion (revised from $1,135.0 billion) and total inventories, $660.6 billion (revised from $660.8 billion).

Gross Domestic Product - 3rd quarter (Second Estimate)
(11-29-17) Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent. Real gross domestic income (GDI) increased 2.5 percent in the third quarter, compared with an increase of 2.3 percent (revised) in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.9 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter. The increase in real GDP in the third quarter reflected positive contributions from PCE, private inventory investment, nonresidential fixed investment, and exports that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased. The acceleration in real GDP in the third quarter reflected an acceleration in private inventory investment, a downturn in imports, and smaller decreases in state and local government spending and in residential fixed investment that were partly offset by decelerations in PCE, in nonresidential fixed investment, and in exports. Current-dollar GDP increased 5.5 percent, or $259.0 billion, in the third quarter to a level of $19,509.0 billion. In the second quarter, current-dollar GDP increased 4.1 percent, or $192.3 billion. The price index for gross domestic purchases increased 1.8 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter (table 4). The PCE price index increased 1.5 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.4 percent, compared with an increase of 0.9 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.0 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; nonresidential fixed investment, state and local government spending, and private inventory investment were revised up from the prior estimate.

National Association of Home Builders - New Home Sales
(09-26-17) Sales of newly built, single-family homes in August fell 3.4 percent to a seasonally adjusted annual rate of 560,000 units from an upwardly revised July reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This was the lowest sales reading since December 2016. However, year-to-date, new home sales are 7.5 percent above their level over the same period last year. "This month's report is another reminder that builders need to manage rising supply-side costs to meet consumer demand for affordably priced homes," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. "The year-to-date growth shows that new home sales are continuing to make consistent, long-term gains," said NAHB Chief Economist Robert Dietz. "However, we may see more volatility in the next few months as communities affected by the recent hurricanes experience construction delays and other economic disruptions." The inventory of new homes for sale was 284,000 in August, which is a 6.1-month supply at the current sales pace. Regionally, new home sales remained unchanged in the Midwest. Sales fell 2.6 percent in the Northeast, 2.7 percent in the West and 4.7 percent in the South.

NAHB Builder Confidence
(11-18-17) Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in November on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest report since March, and the second highest on record since July 2005. "November's builder confidence reading is close to a post-recession high - a strong indicator that the housing market continues to grow steadily," said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. "However, our members still face supply-side constraints, such as lot and labor shortages and ongoing building material price increases." "Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory," said NAHB Chief Economist Robert Dietz. "With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017." Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. Two out of the three HMI components registered gains in November. The component gauging current sales conditions rose two points to 77 and the index measuring buyer traffic increased two points to 50. Meanwhile, the index charting sales expectations in the next six months dropped a single point to 77. Looking at the three-month moving averages for regional HMI scores, the Northeast jumped five points to 54 and the South rose one point to 69. Both the West and Midwest remained unchanged at 77 and 63, respectively.

Housing Starts and Permitting
(10-18-17) Building Permits: Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent (±1.6 percent) below the revised August rate of 1,272,000 and is 4.3 percent (±1.7 percent) below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent (±1.7 percent) above the revised August figure of 800,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in September. Housing Starts: Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,127,000. This is 4.7 percent (±8.1 percent)* below the revised August estimate of 1,183,000, but is 6.1 percent (±8.8 percent)* above the September 2016 rate of 1,062,000. Single-family housing starts in September were at a rate of 829,000; this is 4.6 percent (±8.5 percent)* below the revised August figure of 869,000. The September rate for units in buildings with five units or more was 286,000. Housing Completions: Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1,109,000. This is 1.1 percent (±12.4 percent)* above the revised August estimate of 1,097,000 and is 10.3 percent (±11.9 percent)* above the September 2016 rate of 1,005,000. Single-family housing completions in September were at a rate of 781,000; this is 4.6 percent (±11.4 percent)* above the revised August rate of 747,000. The September rate for units in buildings with five units or more was 322,000.

Steel Service Centers - Shipments and Inventory
(11-15-17)  Substantial Shipment Growth in October: October shipments increased over 2016 levels for steel and aluminum in both the U.S. and Canada. inventory positions improved across the board as well. U.S. Service Center Activity: U.S. service center steel shipments in October 2017 increased 10.7% from October, 2016. Steel product inventories increased 5.6% from October a year ago. U.S. service center shipments of aluminum products in October increased by 16.8% from the same month in 2016.  Inventories of aluminum products increased 5.4% from October a year ago. Canadian Service Center Activity: Canadian service center shipments of steel products in October 2017 increased by 9.8% from October 2016. Steel product inventories increased 8.3% from October a year ago. Canadian service center aluminum shipments in October increased 7.0% from the same month in 2016. Inventories of aluminum products decreased 2.0% from October a year ago.

The Employment Situation
(11-03-17) Total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in food services and drinking places increased sharply, mostly offsetting a decline in September that largely reflected the impact of Hurricanes Irma and Harvey. In October, job gains also occurred in professional and business services, manufacturing, and health care. Household Survey Data: The unemployment rate edged down by 0.1 percentage point to 4.1 percent in October, and the number of unemployed persons decreased by 281,000 to 6.5 million. Since January, the unemployment rate has declined by 0.7 percentage point, and the number of unemployed persons has decreased by 1.1 million. Among the major worker groups, the unemployment rates for adult women (3.6 percent) and Whites (3.5 percent) declined in October. The jobless rates for adult men (3.8 percent), teenagers (13.7 percent), Blacks (7.5 percent), Asians (3.1 percent), and Hispanics (4.8 percent) showed little change. In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.6 million and accounted for 24.8 percent of the unemployed. The labor force participation rate decreased by 0.4 percentage point to 62.7 percent in October but has shown little movement on net over the past 12 months. The employment-population ratio declined by 0.2 percentage point over the month to 60.2 percent, after increasing by 0.3 percentage point in September. The employment-population ratio is up by 0.5 percentage point over the year. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 369,000 to 4.8 million in October. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs. Over the past 12 months, the number of involuntary part-time workers has decreased by 1.1 million. In October, 1.5 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 524,000 discouraged workers in October, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.0 million persons marginally attached to the labor force in October had not searched for work for reasons such as school attendance or family responsibilities.

Retail Sales - Advanced Estimates
(10-13-17) Advance Estimates of U.S. Retail and Food Services Advance estimates of U.S. retail and food services sales for September 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $483.9 billion, an increase of 1.6 percent (±0.5 percent) from the previous month, and 4.4 percent (±0.7 percent) above September 2016. Total sales for the July 2017 through September 2017 period were up 3.9 percent (±0.5 percent) from the same period a year ago. The July 2017 to August 2017 percent change was revised from down 0.2 percent (±0.5 percent)* to down 0.1 percent (±0.1 percent)*. Retail trade sales were up 1.7 percent (±0.5 percent) from August 2017, and up 4.7 percent (±0.7 percent) from last year. Gasoline Stations were up 11.4 percent (±1.4 percent) from September 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 10.7 percent (±2.1 percent) from last year.


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