Contractors who have been battling a resurgence in inflation, starting with a doubling of steel prices during the spring of 2004 through the doubling of copper prices last quarter, finally got a break. During the third quarter, the decline in housing starts gained enough momentum to begin pulling down prices for some materials such as lumber, plywood and oriented strand board.
Even commodity prices appear to have behaved themselves during the third quarter. “The good news is that we have seen a significant drop in the price of oil, which has fallen below $70 per barrel,” says Julian Anderson, a principal with Rider Hunt Levett & Bailey, Phoenix. “We are also seeing the end of the speculative boom in commodity prices, particularly copper and aluminum.” For example, ENR’s survey of “Big Box” material prices shows prices for copper water tubing falling 18% this quarter after jumping 108% in the second quarter .