Construction Materials Prices Keep Rising in February

Construction materials prices increased 1.3 percent from January to February, a monthly surge equivalent to the gains made over the whole of 2012, according to the AGC. The spike was driven primarily by price hikes for gypsum products, lumber and diesel fuel.

Prices for construction materials jumped in February, driven by extreme increases in items used in new housing and nonresidential building renovations, according to a March 15 report from the Associated General Contractors of America.

The producer price index (PPI) that tracks what contractors pay for construction materials leaped 1.3 percent between January and February, equaling the entire increase for 2012. The index was 2.0 percent higher than in February 2012, outpacing the increase in prices contractors can charge for most types of new buildings.

"For the second month in a row, contractors endured outsized price hikes for gypsum wallboard, lumber, and insulation materials," said Ken Simonson, chief economist for the AGC. "Soaring diesel prices mean contractors are paying more for fuel they buy and, via fuel surcharges, for the thousands of deliveries of materials and equipment required for construction projects."

Lumber and plywood prices rose 2.3 percent in February and 15.8 percent from a year ago. The price index for diesel fuel shot up 7.2 percent for the month and 3.8 percent year-over-year. The index for gypsum products, such as wallboard and plaster, climbed 4.4 percent in February, following an 11.8 percent leap in January, for a cumulative rise of 17.8 percent over the past 12 months.

Prices for metals and paving materials showed mixed patterns. Asphalt paving prices retreated 0.1 percent for the month but edged up 1.1 percent over 12 months, while concrete prices increased 0.3 percent and 2.3 percent, respectively. Copper and brass mill prices rose 0.7 percent for the month but remained 2.1 percent below year-ago levels.

Click here to view the February 2013 PPI table.