Construction Materials Down Slightly in May

Costs for construction materials ticked downward in May, and many categories were unchanged, including hand and edge tools, due to a slowing economy and falling energy prices.

Prices for building materials generally fell in May, according to the latest data, due to a fall in energy prices and a general economic slowdown.

Construction machinery prices, seasonally adjusted, increased 0.3 percent in May, following a 0.5 percent increase in April, according to a Bureau of Labor Statistics (BLS) report. The same category increased 4.5 percent year-over-year. Prices for power hand tools also increased 0.3 percent from April, and construction machinery rental prices, as well as prices for hand and edge tools, were unchanged.

Cement prices dropped 0.3 percent in May, all but erasing a 0.4 percent increase in April. Cement is up only 1.1 percent year-over-year, and prices are actually down 9.0 percent from May 2009. Cement prices are expected to increase as the housing market improves, but the decline in projects funded by federal stimulus could keep larger advances from occurring.

Economists are predicting continued improvement, but at a slow pace that is unlikely to pick up until the second half of 2013 at the earliest. The cost of construction materials will likely continue to increase slowly with inflation, as long as energy costs remain low. A spike in oil and fuel prices is the biggest threat to materials prices, and the economy as a whole.