Materials price inflation low but rising

August 01, 2003 |

Construction materials prices increased at nearly a 1% annual pace in early 2003 after close to a 0.5% gain last year and a small decline in 2001. Commodities, such as asphalt, concrete, aggregates, and stone, have had the most price increase.

This is typical early in an economic expansion. But producer supply constraints have pushed reinforcing steel and gypsum product prices up more than 5% in the last year.

This pattern of price increases has raised materials cost most for heavy construction and least for residential, with nonresidential buildings in between.

In an improving economy, the outlook is for slowly rising inflation for several years, although lower oil prices and steady construction spending should keep inflation closer to 0% than 1% for the remainder of 2003.

The Federal Reserve Board is now promoting inflation to avoid a deflationary recession, so there is now a substantial risk that construction materials inflation will increase to 3% or more beyond 2004.

 

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