Construction Materials Prices Inch Down in September
Construction materials prices inched down 0.1% in September but rose 1.6% compared to the same time last year, according to the U.S. Dept. of Labor’s Oct. 15 Producer Price Index. Prices for inputs to construction industries have remained unchanged from June to August—the longest such period since the price index for construction inputs began in 1986. Inputs to nonresidential construction fell 0.2% for the month but were 1% higher than in September 2013.
Crude energy materials prices declined 1% in September and are 7.9% lower than a year ago. Natural gas prices climbed 4% in September after decreasing in the three previous months. However, on a year-over-year basis, natural gas prices have expanded for 22 consecutive months.
“The decline in oil prices has been simply stunning and is largely in response to growing evidence of weakness in Europe,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Forecasts of European economic performance are seemingly being downgraded on a daily basis, including forecasts of Germany’s economy, which heretofore has been a reasonably strong performer.
“Without the decline in oil prices, which could fall even further looking ahead, materials prices in the aggregate would not have decreased in September,” said Basu. “In fact, a number of materials prices actually rose during the month, including iron and steel (0.5%) and softwood lumber (2.7%). Stakeholders also should note that the U.S. dollar has been rising for much of 2014, which has a tendency to suppress materials price increases.”
The following materials prices increased in September.
• Softwood lumber prices expanded 2.7% and are 10.2% higher than one year ago.
• Prices for plumbing fixtures expanded 0.1% in September and are up 3.1% on a year-over-year basis.
• Steel mill products prices rose 0.1% for the month and are 4.7% higher than one year ago.
• Nonferrous wire and cable prices grew 0.1% on a monthly basis, but are unchanged from one year ago.
• Prices for prepared asphalt, tar roofing, and siding expanded 0.2% for the month, but are down 9.8% on a year-ago basis.
• Iron and steel prices expanded 0.5% in September and are up 4.6% from the same time last year.
• Natural gas prices expanded 4% in September and are 9.9% higher than one year ago.
Four of the 11 key construction inputs did not experience price increases for the month.
• Concrete products prices fell 0.3% in September but are up 3.6% on a year-over-year basis.
• Fabricated structural metal products remained flat for the month and have expanded 1.9% on a year-over-year basis.
• Crude petroleum prices fell 3.9% in September and are down 15.5% from the same time last year.
• Crude energy materials prices fell 1% in September and are 7.9% lower year over year.