Building materials prices slide for fourth straight month

August 11, 2010

The materials cost index for nonresidential buildings fell 0.4% in January, the fourth consecutive monthly decline, according to Jim Haughey, PhD, BD+C Economist and Chief Economist with Reed Construction Data. The February to September 2008 price spike from the worldwide commodity boom has now been completely reversed. Ahead, the materials price index is expected to be stable to slightly lower for a few more months and then increase very modestly for the rest of the year.

The materials price index was steady for three years during 2000-02 after the last building boom but a shorter period of stable materials prices for nonresidential construction is likely this time because the collapse in building activity is expected to be less than in 2000-02.

The largest January price declines were for extruded aluminum (-7.4%), nonferrous pipe and tube (-5.9%), diesel fuel (-4.3%), and softwood lumber (-3.4%). The only significant January price increase was for ready-mix concrete (+2.3%). Prices for manufactured construction materials were generally unchanged to slightly higher. These trends should continue for a few more months.

Percent change in: 1 month 3 months 12 months
Source: Producer Price Index. Bureau of Labor Statistics
Construction commodities
Cement n/a n/a n/a
Construction sand, gravel, crushed stone 1.3 2.0 6.0
Softwood plywood -2.4 -13.5 -10.0
Softwood lumber -3.4 -13.5 -8.2
Manufactured materials
Gypsum products 1.0 4.0 9.0
Diesel fuel -4.3 -52.0 -41.5
Paint 0.0 3.8 16.4
Plastic construction products 0.3 -2.1 3.3
Vitreous plumbing fixtures 0.0 0.1 0.5
Ceramic tile 0.2 2.0 3.1
Flat glass -1.7 0.8 2.8
Hot-rolled bars, plates, structural shapes -3.2 -26.8 -0.9
Extruded aluminum rod, bar, shapes -7.4 -18.5 -15.3
Architectural metalwork -2.6 -3.7 18.8
Metal plumbing fixtures 0.5 -0.3 3.5
Builders' hardware 0.3 0.7 13.4
Sheet metal products -0.3 -2.9 7.0
Nonferrous pipe and tube -5.9 -34.0 -33.5
Building brick -0.1 0.2 0.5
Ready-mix concrete 2.3 3.6 5.8
Concrete block and brick 0.0 0.9 4.1
Millwork (window, door, cabinet) 0.2 0.7 2.0
Engineered wood products -1.9 -2.8 1.4
Metal doors, sash, trim -0.6 0.0 4.4
Summary
Construction materials (commodity level) -0.7 -6.7 4.8
Inputs to construction industries -0.3 -8.5 1.8
Inputs to nonresidential construction -0.4 -11.7 0.8

         
 

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