The index for construction inputs, which includes building materials and components essential to the industry (like diesel fuel), remained unchanged for the second month in a row in November. Prices for residential and non-residential materials declined slightly month-over-month, as did prices for raw construction materials, though all three categories increased slightly year-over-year.

The Producer Price Index (PPI) for construction materials and components was unchanged on a seasonally adjusted basis for the second month in a row in November, according to a Bureau of Labor Statistics report. The index was 1.7 percent higher year-over-year without the seasonal adjustment, and was 8.2 percent higher than in November 2010.

The residential construction inputs index was down 0.3 percent in November after sinking 0.4 percent in October. The index, which excludes capital equipment, was 1.5 percent higher than in November 2012 and 9.2 percent higher than in November 2010.

Prices of building materials used primarily in residential construction also declined in October and November, though slightly less. In addition to the price movements already mentioned for nonresidential construction materials, a drop in oriented strand board prices and a jump in HVAC equipment prices affected November residential construction materials prices.

The nonresidential construction inputs index decreased 0.6 percent in November after falling 0.5 percent in October. The index, which also excludes capital equipment, was 0.7 percent higher than in November 2012 and was 8.5 percent higher than November 2010.

Prices for inputs used in nonresidential construction were down for the second month in a row. Most of the decrease in November can be traced to reductions in cement, gypsum, and energy (except for natural gas prices, which rose) and energy related materials prices. The price decline was partially offset by increases in steel, aluminum, and softwood lumber prices.

Prices for raw materials used in construction or to produce products used in construction declined 0.3 percent in November after advancing 0.4 percent in October. The index was up 2.6 percent from November 2012 and was up 7.4 percent from November 2010.

Reed Construction Data chief economist Bernard Markstein expects both the construction sector and the overall economy to improve throughout 2014. Building materials prices are likely to rise modestly early in the year, Markstein said, and begin to increase at a faster pace by late spring/early summer.