“If the United States were to find a more permanent solution for its budgetary issues, the pace of materials price increases likely would accelerate.” —ABC Chief Economist Anirban Basu.
Construction materials prices rose only 0.1 percent in September and are up just 0.6 percent year over year, according to the Oct. 29 Producer Price Index release by the Department of Labor. Nonresidential construction materials were unchanged for the month and are 0.1 percent higher than one year ago.
“Despite surging stock and asset prices, geopolitical uncertainty in many parts of the world and the ongoing extraordinary monetary stimulus in the United States, construction materials prices have remained remarkably stable,” said Associated Builders and Contractors Chief Economist Anirban Basu. “This trend stands in stark contrast to the volatility experienced throughout much of this decade, including the growth in prices in 2004, 2007 and 2008.”
Overall, the nation’s wholesale goods prices fell 0.1 percent in September and are up 0.3 percent year over year. In large measure, this reflects a U.S. economy that continues to struggle to expand at a pace greater than 2 percent.
“Uncertainty emanating from Washington D.C., may temper the dramatic turnaround suggested by other economic indicators, such as Europe coming out of a recession and growth in China firming up,” Basu said. “If the United States were to find a more permanent solution for its budgetary issues, the pace of materials price increases likely would accelerate.
“That said, this recent streak of month-to-month stability may continue,” Basu said. “Similar to September, the majority of nonresidential construction-related categories saw price changes of less than 1 percent in absolute value. More specifically, iron and steel, asphalt, tar roofing, siding and steel mill products all changed less than 0.4 percent.”
The following materials prices increased in September:
• Fabricated structural metal product prices edged up 0.2 percent and have risen 0.1 percent on a year-over-year basis.
• Softwood lumber prices climbed 1.2 percent and are 9.8 percent higher than one year ago.
• Nonferrous wire and cable prices rose 0.1 percent, but are down 3.4 percent from September 2012.
• Steel mill products prices edged 0.3 percent higher, but are 4.4 percent lower than one year ago.
• Natural gas prices grew 0.2 percent in September and are 25.8 percent higher than September 2012.
• Crude petroleum prices rose 0.6 percent and are up 7.9 percent year over year.
• Crude energy prices expanded 2 percent in September and are 9.7 percent higher than last year.
A number of key construction inputs did not experience price increases for the month:
• Prices for plumbing fixtures and fittings decreased 0.3 percent, but are up 1.7 percent on a year-over-year basis.
• Concrete products were unchanged in September and are up 3.1 percent on a yearly basis.
• Prices for prepared asphalt, tar roofing, and siding fell 0.1 percent for the month, but are 2.9 percent higher than September 2012.
• Iron and steel prices decreased 0.3 percent and remain 3.9 percent lower than the same time last year.
To view the previous Producer Price Index report, click here