Prices for construction inputs – materials used in building and necessary ancillary supplies, like diesel fuel – increased 0.2 percent from July to August. Building materials prices are expected to rise modestly over the remainder of the year, and stronger than expected growth could translate into greater price inflation. Lower than expected growth would prompt a slower rise in prices, which, given the recent government shutdown and related market uncertainties, appears more likely.

The Producer Price Index (PPI) for materials and components used in construction increased 0.2 percent in August on a seasonally adjusted basis, after no change in July. The index rose 2.0 percent on a not seasonally adjusted (NSA) year-over-year basis, and has increased 8.1 percent since August 2010, according to a recent Bureau of Labor Statistics (BLS) report.

Prices for raw materials used in construction or produce construction products declined 0.2 percent after increasing 0.4 percent in July. The index was up 1.4 percent from August 2012, and up 5.6 percent from August 2010.

Prices of building materials used mainly in residential construction rose in August, though not as sharply "?u a 0.3 percent increase that followed a 0.1 percent dip in July. Higher prices for insulation and lumber contributed to the rise. Lower prices for oriented strand board (OSB) and gypsum partially offset the increases in residential construction building materials.

An index that measures nonresidential construction inputs (excluding capital equipment) increased 0.5 percent (NSA) in August after decreasing 0.1 percent in July. The index was up 1.2 percent from August 2012 and was up 10.8 percent from August 2010.

An index that measures residential construction inputs (excluding capital equipment) was up 0.3 percent (NSA) in August after slipping 0.1 percent in July. The index was up 1.7 percent from August 2012 and was up 10.4 percent from August 2010.