Construction materials price index continues its four-month slide

August 01, 2005 |

The construction materials price index declined in June to 1.5% below the February peak level, but the index is still 3.6% higher than a year earlier.

Prices for lumber, sheet metal, steel, plumbing fixtures, and sheet metal products fell during the spring. The largest price increases were for gypsum and concrete products, diesel fuel, and construction machinery. Softwood lumber and plywood accounted for most of the slowdown in inflation, although the prices for both temporarily picked up in June.

Gypsum and cement will continue to be principal inflation drivers for the rest of the year until added capacity is available. Gypsum product prices are up 12.7% over the last year and cement prices rose 12.2% over the same period.

Prices for all construction materials will gradually feel the impact of rising inflation in the economy over the next year. This is inevitable with the unemployment rate falling to 5% and industrial capacity utilization rate rising to 80% in June.

Materials price trends: The good, the bad, and the ugly

(% change in the last year)

Source: U.S. Department of Labor

Prices for lumber, plywood, steel, sheet metal products, and plumbing fixtures fell during the spring.

Softwood plywood -11.7
Softwood lumber -6.7
Flat glass 2.8
Sheet metal products 3.0
Millwork 0.7
Ceramic tile 2.1
Diesel fuel 63.9
Engineered wood products 17.2
Gypsum products 12.7
Cement 12.2
Construction machinery 7.6

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