The construction materials price index for nonresidential buildings fell 0.6% in March extending the decline since the September peak to 12.8%. Materials prices are back to the January 2008 level before the 14% jump in prices from March through September. The materials price index is expected to decline slowly for a few more months but be rising modestly again by the end of the year and rising more quickly next year, perhaps up 4-5% from the 2009 average.
March’s price drop was lead by diesel fuel (-8.9%), structural steel (-6.4%) and lumber (-3.5%). Weekly price reports assure that diesel prices will be higher in April. Another decline in steel and steel product prices is assured by the 8.3% March decline in steel scrap prices in a still weakening world economy. Softwood lumber prices are 11% below a year ago and 35% below three years ago. Yet they are likely to drop marginally lower in the next few months before a pickup in residential construction begins as early as this summer.
Prices for components used in the building envelope and mechanical systems have been approximately steady early in 2009. This includes concrete, brick, glass and plastics as well as building machinery. Surplus factory capacity assures little price change over the next year even when the world prices of construction commodities began to rise again next winter.
Components used in common with housing, such as lumber, gypsum and low rise roofing, have the most risk of price increase over the next year as the housing market begin to recover later this year. Components used in common with highway projects, such as structural steel and concrete also have an elevated risk for price increases late in 2009 when economic stimulus funded work on transportation projects becomes significant.
Price trends vary widely by region depending on the level and mix of construction work in each market. Price level and trend information for more than 300 markets is available from R S Means at www.reedconstructiondata.com/construction-costs/us/ 
|Construction Materials Inflation, March 2009|
|Percent Change in …..||1 month||3 months||12 months||3 years|
|Construction Sand, Gravel & Crushed Stone||0.0||2.3||6.1||23.6|
|Plastic Construction Products||0.1||0.2||3.5||1.4|
|Vitreous Plumbing Fixtures||0.0||0.1||1.9||-4.1|
|Hot rolled bars, plates & structural shapes||-6.4||-12.0||-15.1||6.1|
|Extruded Aluminum rod, bar and other shapes||-2.3||-12.5||-23.9||-18.3|
|Metal Plumbing Fixtures||0.3||0.1||2.6||13.3|
|Sheet Metal Products||-1.8||-3.2||2.9||9.8|
|Nonferrous Pipe and Tube||-1.0||-1.4||-41.3||-5.2|
|Ready Mix Concrete||-0.7||1.4||4.8||13.2|
|Concrete Block & Brick||3.3||4.1||8.0||15.1|
|Millwork (window,door, cabinet)||0.3||1.1||2.0||5.6|
|Engineered Wood Products||0.8||-3.9||-0.9||-13.8|
|Construction Machinery Rental (incl. oilfield equip.)||0.3||0.6||-1.3||7.7|
|Trucks over 14,000 Ibs. GVW||-0.2||2.0||5.1||13.4|
|Metal Doors, Sash and Trim||1.6||0.4||5.4||12.2|
|Construction Materials (commodity level)||0.3||-1.5||2.0||7.7|
|Inputs to Construction Industries||-0.6||-1.5||-2.1||8.4|
|Inputs to Nonresidential Construction||-0.6||-1.7||-3.7||8.8|
|Source: Producer Price Index. Bureau of Labor Statistics|