BlueTarp Building Supply Index sees big decline
Contractors say they are optimistic about economy.
BlueTarp Financial, the Portland, Maine-based credit management company for B2B suppliers, reported that its Building Supply Index for the first quarter 2019 declined to a seasonally unadjusted average of 120.97 from 125.59.
This is the most significant index decline since the second quarter of 2016.
BlueTarp said the decline continues to be driven by a drop in consumer confidence. After it peaked at 137.9 in October, the highest in nearly two decades, consumer confidence dipped to 124.2 in March 2019, the lowest in over a year.
Based on BlueTarp’s supplemental survey, nearly 20% of contractors report lower sales in Q1 2019 compared to last year, driven in part by more difficult weather this year compared to prior years. Contractors report a slightly more optimistic view of the economy in the next 12 months, which mirrors the rebound in the equity markets in first quarter and continued strong GDP and employment news, however.
“Our index picked up a noticeable drop in spend per contractor in Q1,” said Scott Simpson, CEO of BlueTarp. “We suspect this to be weather-impacted and will rebound but it could be something more meaningful if the trend continues in Q2. We’ll be watching.”
Values below 100 on the index reflect recessionary or recovering performance. Values above 100 reflect healthy economic activity.
The report represents trends from 120,000 pro customers and over 1,000 active building material suppliers across the United States. It also incorporates macro-economic drivers including building permits, construction spend, and consumer confidence as reported monthly by the Census Bureau and The Conference Board.
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