Materials costs spike higher in the wake of hurricane season

November 01, 2005 |

Construction materials costs are being abruptly pushed higher at the end of 2005 by the added demand and the reduced supply caused by the season's severe hurricanes. This ends a year of a steady price index, where rising fuel, chemical, plastics and cement prices were offset by falling lumber and steel prices during the year, ending in August.

The hurricane-related price spikes in lumber and steel will disappear by year-end. Lumber and steel prices will retreat to the mid-2005 level, but rebuilding on the Gulf Coast will keep prices from falling measurably in 2006.

The prices for cement-, oil-, and gas-based products will also return to their pre-hurricane level by year-end. The energy supply constraint will begin to loosen next summer, permitting slightly lower fuel and chemical prices. But the supply constraint for cement will persist longer.

Plastics prices will rise into 2007 due to the destruction of several Gulf Coast petrochemical plants.

Construction materials price index

Period Annual %change
Source: U.S. Dept. of Labor

Forecast: Reed Research Group

Added demand and the reduced supply caused by the hurricanes has pushed construction materials costs higher. This ends a year of a steady price index, where rising fuel, chemical, plastics and cement prices were offset by falling lumber and steel prices during the year, ending in August.
Dec. '99 – Dec. '03 1.0%
Dec. '03 – Aug. '04 14.5%
Aug. '04 – Aug. '05 0.2%
Aug. '05 – Dec. '05 9.0%
Dec. '05 – Dec. '06 3.5%

Add new comment

Your Information
Your Comment

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Refresh Type the characters you see in this picture. Type the characters you see in the picture; if you can't read them, submit the form and a new image will be generated. Not case sensitive.  Switch to audio verification.
Overlay Init