Winter Storms Drop Construction Materials Sales

Posted by Rumin Mann
February 18th, 2011

ob site shutdowns during the winter storms forced construction materials suppliers to cut production 0.8% in December in response to a 0.6% fall in sales. The weather worsened in January and has not returned to normal so far in February so the materials market will weaken further early in 2011. Expect a rebound in orders, production and sales when normal weather returns. Construction spending had begun to inch up before the winter storms and will resume growing when construction weather conditions are better.

Manufacturers’ inventory/sales ratio rose to 1.38. It had been as high as 1.59 early in 2009. About 1.30 is a comfortable operating level so production gains will be less than sales gains well in to 2011.

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