Construction Materials Prices Remain Flat in May
Overall construction materials prices remained flat in May but are up 1.6% year over year according to the June 13 Producer Price Index release supplied by the U.S. Dept. of Labor. Nonresidential construction materials prices fell 0.2% for the month but are 1.3% higher than at the same time one year ago.
“With construction spending expanding only in fits and starts and given recent evidence of disappointing global economic performance, it comes as little surprise that most construction materials prices are not rising,” said Associated Builders and Contractors Chief Economist Anirban Basu. “For the better part of two years, materials prices have been remarkably stable, which fits neatly into the context of soft expansions in both domestic and global construction volume.”
Crude energy materials prices expanded 2.7% in May and are 4.8% higher than one year ago. Natural gas prices expanded by 3.4% in May after declining significantly during the previous two months. Overall, the nation’s wholesale goods prices remained flat in May and have increased 2.5% year-over-year.
“However, the future could be markedly different with the worrisome situation in Iraq causing oil prices to rise,” said Basu. “This price dynamic can impact the prices of other materials, which means that materials price inflation may ensue even in the absence of a meaningful pickup in nonresidential construction activity. The impact of revelations regarding the metal financing scandal in China may also cause materials to become more volatile, but in that case, the impact may actually be to suppress future price increases.”
The following materials prices increased in May.
• Crude petroleum prices increased 3.2% and are up 3.7% from May 2013.
• Nonferrous wire and cable prices gained 0.5% on a monthly basis but are down 2.1% from May 2013.
• Natural gas prices expanded by 3.4% in May and are 13.2% higher than one year ago.
• Crude energy materials prices expanded by 2.7% in May and are 4.8% higher year over year.
Seven of the 11 key construction inputs did not experience price increases for the month.
• Prices for prepared asphalt, tar roofing and siding declined 2.1% for the month and are down 5.8% from the same time last year.
• Softwood lumber prices fell 0.2% in May and are 0.3% lower than one year ago.
• Prices for plumbing fixtures remained flat for the month and are up 2% on a year-over-year basis.
• Fabricated structural metal product prices remained flat for the month and have risen 1.1% on a year-over-year basis.
• Concrete products prices fell 0.1% in May but have increased 3.4% from the same time last year.
• Iron and steel prices declined 1% in May but are up 4.3% from the same time last year.
• Steel mill products prices fell 0.1% for the month but are 3.4% higher than one year ago.