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1833909-23-13 | News

Building Materials Costs
Tick Upward in August

The Producer Price Index for construction materials increased 0.3 percent in August but rose just 1.4 percent year-over-year, remaining relatively stable despite recent dips in some construction segments and growing uncertainty in the larger economy. A 2.7 percent monthly decline in crude energy prices offset increases in softwood lumber and concrete products, and many other categories fluctuated by less than one percent.

Construction materials prices rose 0.3 percent in August and are up 1.4 percent year over year, according to the latest Producer Price Index release from the Department of Labor.

In a world characterized by looming warfare, fluctuating global currencies, rising U.S. interest rates and plunging gold prices, one would expect much more volatility in materials prices,” said Associated Builders and Contractors chief economist Anirban Basu. “Despite all of those shifting factors, construction materials prices remain remarkably stable, which is noteworthy given the price volatility experienced in 2004 and 2008.”

Nonresidential construction materials increased 0.5 percent for the month and are 1.2 percent higher than one year ago. The following materials prices increased in August:

Concrete products: +0.1 percent higher since July 2013 (monthly), +3.1 percent from August 2012 (year-over-year).

Fabricated structural metal products: +0.2 percent monthly, +0.2 percent year-over-year.

Nonferrous wire and cable: +0.3 percent monthly, -3.0 percent year-over-year

Softwood lumber: +2.4 percent monthly, +9.9 percent year-over-year.

Steel mill products: +0.1 percent monthly, -3.4 percent year-over-year.

Prices for several key construction inputs fell in August, offsetting the increases and keeping the
PPI relatively flat.

Crude energy: -2.7 percent in August, +10.3 percent annually.

Plumbing fixtures and fittings: -0.6 percent monthly, +2.4 percent year-over-year.

Prepared asphalt, tar roofing and siding: -0.8 percent monthly, +5.4 percent since August 2012.

Iron and steel: -0.1 percent monthly, -3.4 percent year-over-year.

“Relative stability in month-to-month prices may continue,” Basu said. “It is worth noting that the monthly change in prices was less than one percent in absolute value for many categories, including iron and steel, concrete products and steel mill products.