Tag Archive for 'materials'

Engineering and Construction Costs Increase at Slower Pace in April, IHS Markit Says

Construction costs continued to increase in April for the 30th consecutive month, according to IHS Markit (Nasdaq: INFO) and the Procurement Executives Group (PEG). The current headline IHS Markit PEG Engineering and Construction Cost Index registered 58.2 this month, a slight decline from March’s reading of 60.4. The materials and equipment price index fell to 59.2 in April with labor indexes also taking a step back in April but both remain firmly in positive territory, indicating continued price increases. Survey respondents reported falling prices for carbon steel pipe; all other categories ranging from turbines to transportation registered price increases. The index for fabricated structural steel climbed into positive territory, indicating more reports of price increases than decreases, for the first time since November. “Fabricated structural steel prices picked up late in the first quarter due to higher raw materials costs and a seasonal pick-up in demand,” said Amanda Eglinton, principal economist, pricing and purchasing, IHS Markit. “Steel input costs will decline over the near-term, however rising labor costs and supportive demand will limit declines in prices until later in the year.”

The sub-index for current subcontractor labor costs came in at 56.0, down from 59.7 in March. Labor costs rose in all regions of the United States and stayed nearly flat in both Western and Eastern Canada.

The six-month headline expectations for construction costs index reflected increasing prices for the 32nd consecutive month. The six-month materials and equipment expectations index registered 70.6 in April after sliding to 66.1 last month. Expectations for sub-contractor labor rose to 74.6 in April, up from 68.1 in March, with labor costs expected to rise in all regions of the U.S. and Canada.

In the survey comments, respondents indicated a tight labor market for all skilled trade workers.

o learn more about the IHS Markit PEG Engineering and Construction Cost Index or to obtain the latest published insight, please click here.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics, and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance, and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.

ABC Reports: Construction Materials Prices Inch Down in September

CEU2“The decline in oil prices has been simply stunning and is largely in response to growing evidence of weakness in Europe.”—ABC Chief Economist Anirban Basu.

PPI_10 15 2014Construction materials prices inched down 0.1 in September, but rose 1.6 percent compared to the same time last year, according to the U.S. Department 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 percent for the month, but were 1 percent higher than in September 2013.

Crude energy materials prices declined 1 percent in September and are 7.9 percent lower than one year ago. Natural gas prices climbed 4 percent 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 percent) and softwood lumber (2.7 percent). 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 percent and are 10.2 percent higher than one year ago.
  • Prices for plumbing fixtures expanded 0.1 percent in September and are up 3.1 percent on a year-over-year basis.
  • Steel mill products prices rose 0.1 percent for the month and are 4.7 percent higher than one year ago.
  • Nonferrous wire and cable prices grew 0.1 percent on a monthly basis, but are unchanged from one year ago.
  • Prices for prepared asphalt, tar roofing, and siding expanded 0.2 percent for the month, but are down 9.8 percent on a year-ago basis.
  • Iron and steel prices expanded 0.5 percent in September and are up 4.6 percent from the same time last year.
  • Natural gas prices expanded 4 percent in September and are 9.9 percent 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 percent in September, but are up 3.6 percent on a year-over-year basis.
  • Fabricated structural metal products remained flat for the month and have expanded 1.9 percent on a year-over-year basis.
  • Crude petroleum prices fell 3.9 percent in September and are down 15.5 percent from the same time last year.
  • Crude energy materials prices fell 1 percent in September and are 7.9 percent lower year over year.

To view the previous Producer Prices Index report, click here

ABC Reports: Construction Materials Prices Flat in May

CEU2“Materials prices have been remarkably stable, which fits neatly into the context of soft expansions in both domestic and global construction volume.” —ABC Chief Economist Anirban Basu.

PPI_6 13 14Overall construction materials prices remained flat in May but are up 1.6 percent year over year according to the June 13 Producer Price Index release supplied by the U.S. Department of Labor. Nonresidential construction materials prices fell 0.2 percent for the month but are 1.3 percent higher than at the same time one year ago.

“With construction spending expanding only in fits and starts and given recent evidence of disappointing global economic performance, it comes as little surprise that most construction materials prices are not rising,” said Associated Builders and Contractors Chief Economist Anirban Basu. “For the better part of two years, materials prices have been remarkably stable, which fits neatly into the context of soft expansions in both domestic and global construction volume.”

Crude energy materials prices expanded 2.7 percent in May and are 4.8 percent higher than one year ago. Natural gas prices expanded by 3.4 percent in May after declining significantly during the previous two months. Overall, the nation’s wholesale goods prices remained flat in May and have increased 2.5 percent year-over-year.

“However, the future could be markedly different with the worrisome situation in Iraq causing oil prices to rise,” said Basu. “This price dynamic can impact the prices of other materials, which means that materials price inflation may ensue even in the absence of a meaningful pickup in nonresidential construction activity. The impact of revelations regarding the metal financing scandal in China may also cause materials to become more volatile, but in that case, the impact may actually be to suppress future price increases.”

The following materials prices increased in May.

Crude petroleum prices increased 3.2 percent in May and are up 3.7 percent from May 2013.

Nonferrous wire and cable prices gained 0.5 percent on a monthly basis but are down 2.1 percent from May 2013.

Natural gas prices expanded by 3.4 percent in May and are 13.2 percent higher than one year ago.

Crude energy materials prices expanded by 2.7 percent in May and are 4.8 percent higher year over year.

Seven of the 11 key construction inputs did not experience price increases for the month.

Prices for prepared asphalt, tar roofing, and siding declined 2.1 percent for the month and are down 5.8 percent from the same time last year.

Softwood lumber prices fell 0.2 percent in May and are 0.3 percent lower than one year ago.

Prices for plumbing fixtures remained flat for the month and are up 2 percent on a year-over-year basis.

Fabricated structural metal product prices remained flat for the month and have risen 1.1 percent on a year-over-year basis.

Concrete products prices fell 0.1 percent in May but have increased 3.4 percent from the same time last year.

Iron and steel prices declined 1 percent in May but are up 4.3 percent from the same time last year.

Steel mill products prices fell 0.1 percent for the month but are 3.4 percent higher than one year ago.

To view the previous PPI report, click HERE.

ABC Reports: Construction Materials Prices Expand Again in February

CEU2“February marks the second consecutive month in which construction materials prices expanded briskly.” —ABC Chief Economist Anirban Basu.

PPI_3 14 14Construction materials prices expanded 0.7 percent in February and are up 0.6 percent over the past year, according to the March 14 producer price index release by the Department of Labor. More specifically, nonresidential construction materials prices are up 0.7 percent for the month and are 0.4 percent higher than the same time one year ago.

“February marks the second consecutive month in which construction materials prices expanded briskly,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Construction materials prices experienced a remarkable lack of volatility during the last three quarters of 2013; however, that trend appears to be firmly behind us.”

Overall, the nation’s wholesale goods prices expanded 0.4 percent in February and are up 1.3 percent from February 2013. Crude energy materials prices and natural gas prices led the way, expanding 14.7 percent and 31.5 percent respectively in February. February marked the crude energy segment’s largest monthly growth since January 2004.

“The harsh winter is to blame for the spike in energy segment prices,” said Basu. “In fact, crude petroleum and natural gas both experienced historic price growth in February. We are certain that February’s data reflects the colder-than-normal winter; however, it is difficult to say if increased demand had any part in the month’s price growth. With the frigid weather continuing through early March, it may be awhile before we know this winter’s true impact.

“Another factor has been a tidal wave of economic news from China, much of which suggests that China’s economy is slowing faster than expected,” said Basu. “That could cause prices to dip during future months. In any case, greater price volatility should be anticipated.”

The prices of the following materials increased in February.

Natural gas prices expanded 31.5 percent in February and are 74 percent higher than one year ago.

Crude energy prices grew 14.7 percent in February and are 18.1 percent higher than one year ago.

Concrete products prices grew 0.9 percent in February and are 3.7 percent higher than one year ago.

Steel mill products prices expanded 0.7 percent for the month and are 1.9 percent higher than one year ago.

Prices for prepared asphalt, tar roofing, and siding expanded by 1.4 percent for the month but are down 0.4 percent from one year ago.

Crude petroleum prices grew 10.6 percent in February and are 3.4 percent higher than one year ago.

Prices for plumbing fixtures expanded 1.5 percent for the month and are 3.1 percent higher than one year ago.

Fabricated structural metal product prices are up 0.1 percent and are 0.4 percent higher than one year ago.

Softwood lumber prices gained 0.5 percent and are 1.2 percent higher than one year ago.

Only two key construction inputs did not experience price increases for the month.

Nonferrous wire and cable prices shed 0.4 percent on a monthly basis and are down 4.3 percent from one year ago.

Iron and steel prices fell 0.4 percent in February but are up 4.3 percent from one year ago.

To view the previous PPI report, click HERE

Construction Materials Prices Rise Only 0.1 Percent In December

CEU2“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis.” —ABC Chief Economist Anirban Basu.

PPI_JanuaryConstruction materials prices expanded just 0.1 percent in December and are up 1.3 percent year over year, according to a Jan. 15 Producer Price Index released by the Department of Labor. Nonresidential construction materials prices also rose only 0.1 percent for the month and are 1 percent higher than the same time one year ago.

“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis,” said Associated Builders and Contractors Chief Economist Anirban Basu. “That said, there was some volatility in individual input segments, including natural gas prices, which were up 7.8 percent, and crude petroleum, which was up 7.1 percent,” Basu said. “These increases are at least partially explained by seasonal factors and do not likely foreshadow aggressive price increases going forward. At the same time, certain input prices fell, including softwood lumber, down 3.3 percent, and nonferrous wire/cable, down 1.4 percent.”

Overall, the nation’s wholesale goods prices expanded 0.4 percent in December and are up 1.2 percent year over year.

“While there is never a guarantee of input price stability, for now things seems reasonably calm,” Baus said. “The world economy is anticipated to accelerate this year to 3.6 percent growth, up from closer to 3 percent last year. That will help push the level of demand for construction materials higher, but not necessarily in ways that are especially damaging to a still-benign U.S. nonresidential construction industry outlook.”

The following materials prices increased in December:

Fabricated structural metal product prices are up 0.1 percent and have risen 0.6 percent on a year-over-year basis.

Natural gas prices rose 7.8 percent in December and are 4.9 percent higher than one year ago.

Natural gas prices rose 7.8 percent in December and are 4.9 percent higher than one year ago.

Crude energy prices grew 4.8 percent in December and are 4.4 percent higher year over year.

Iron and steel prices expanded 1.6 percent in December but are down 5.9 percent from the same time last year.

Prices for plumbing fixtures and fittings rose 0.1 percent for the month and are up 1.6 percent on a year-over-year basis.

Steel mill products prices expanded 0.3 percent for the month but are 6.3 percent lower than one year ago.

A number of key construction inputs did not experience price increases for the month:

Prices for prepared asphalt, tar roofing and siding declined 0.8 percent for the month but are up 3.6 percent from last year.

Concrete products remained flat in December but are up 2.3 percent year over year.

Nonferrous wire and cable prices shed 1.4 percent on a monthly basis and are down 3.4 percent from December 2012.

Softwood lumber prices fell 3.3 percent for the month but are 6.6 percent higher than one year ago.

To view the previous Producer Price Index report, click here.