Construction materials prices rose only 0.3% in August and are up 1.4% year-over-year, according to the Sept. 13 Producer Price Index release by the U.S. Dept. of Labor. In addition, nonresidential construction materials increased 0.5% for the month and are 1.2% higher than one year ago.
“In a world characterized by additional looming warfare, fluctuating global currencies, rising U.S. interest rates and plunging gold prices, one would expect much more volatility in materials prices,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Despite all of those shifting factors, construction materials prices remain remarkably stable, which is noteworthy given the price volatility experienced in 2004 and 2008.”
Overall, the nation’s wholesale goods prices rose 0.3% in August and are 1.4% higher year over year.
“The outlook for the global economy is now improving,” Basu said. “Europe has exited its recession, and growth in China appears to be firming. The consensus 2014 forecast for the United States also calls for more rapid growth, implying that the pace of materials price increases is likely to accelerate.
“That said, relative stability in month-to-month prices may continue,” Basu said. “It is worth noting that the monthly change in prices was less than 1% in absolute value for many categories, including iron and steel, concrete products and steel mill products.”
The following materials prices increased in August.
• Fabricated structural metal products, which edged up 0.2% and have risen 0.2% on a year-over-year basis.
• Softwood lumber prices, which climbed 2.4% after falling for three consecutive months and are 9.9% higher than one year ago.
• Nonferrous wire and cable prices, which rose 0.3% but are down 3% from August 2012.
• Steel mill products prices, which edged 0.1% higher but remain 3.4% lower than one year ago.
• Concrete products, which are 0.1% higher for the month and are up 3.1% on a yearly basis.
A number of key construction inputs did not experience price increases for the month.
• Crude energy prices fell 2.7% in August but are 10.3% higher annually.
• Crude petroleum prices fell 1.2%.
• Prices for plumbing fixtures and fittings decreased 0.6% but are up 2.4% on a year-over-year basis.
• Prices for prepared asphalt, tar roofing, and siding fell 0.8% for the month but are 5.4% higher than August 2012.
• Iron and steel prices decreased by 0.1% and remain 3.4% lower than the same time last year.