Construction Materials Prices Drop in October
The stronger dollar, weaker global economy reduce construction inputs
The Producer Price Index for inputs to construction industries declined for a fourth consecutive month in October, according to a recent analysis of the Bureau of Labor Statistics data released by Associated Builders and Contractors.
The index stands at its lowest level since the first quarter of 2011 as prices for construction inputs declined 0.2% on a monthly basis and 4.6% on a year-ago basis. Nonresidential construction input prices exhibit a similar pattern, falling 0.3% since last month and 5.1% over the past 12 months. Nine of 11 key input prices are down on a year-over-year basis.
“The dollar has continued to increase in value into November against a variety of globally important currencies, including the euro, yen and Canadian dollar,” said ABC Chief Economist Anirban Basu. “Commodity prices, including oil and copper, continue to plummet largely as a result of the strong dollar, though weaker than anticipated economic performance in key emerging nations is also playing a part, including in China, Russia and Brazil. Unless this changes over the course of November’s final two and a half weeks, November will represent a fifth consecutive month of construction industry input price declines.”
Six key input prices rose or remained unchanged in October on a monthly basis, while one remained unchanged:
- Crude petroleum prices expanded by 8.2% in October but are down 43.6% from the same time last year.
- Crude energy materials prices grew by 3% in October but are still down 33.4% on a yearly basis.
- Softwood lumber prices rose by 1.6% on a monthly basis but are down 9% on a yearly basis.
- Fabricated structural metal product prices ticked up 0.2% in October but are down 0.6% from a year ago.
- Plumbing fixtures and fittings prices inched up 0.1% for the month and are up 1.2% from October 2014.
- Nonferrous wire and cable prices increased by 0.1% on a monthly basis but fell 7.4% on a yearly basis.
- Concrete product prices were unchanged from September and have expanded 2.6 from the same time last year.
Four key input prices fell in October on a monthly basis:
- Prepared asphalt, tar roofing, and siding prices dipped 0.3% for the month and are down 2.4% for the year.
- Steel mill product prices fell 1.7% in October and are 16.1% lower than one year ago.
- Natural gas prices shrank 1.8% on a monthly basis and 36% on a yearly basis.
- Iron and steel prices lost 4.4% month-over-month and 21.2% year-over-year.