Results from the Bureau of Labor Statistics showed that prices for construction materials rose 0.8% in March. According to Associated Builders and Contractors, Inc., it was the largest monthly increase in more than two years.
Prices for construction materials have risen for two straight months after falling for the previous six.
Although prices are up on a monthly basis, statistics showed that input prices are down 3.6% on a year-over-year basis, the fourth consecutive month this has occurred. The steady decline in input prices is the longest streak since 2009 as crude petroleum prices fell 4% in March and are down eight of the last nine months.
"Though U.S. nonresidential and residential segments continue to expand, global construction volumes remain suppressed by widespread weakness in Asia, Europe, and Latin America," said ABC Chief Economist Anirban Basu. "With the U.S. dollar likely to get stronger over the next few months as domestic interest rates begin to rise, there is little likelihood of significant increases in construction input prices over the next six to nine months. Overall producer prices managed to increase 0.5% on a monthly basis, the first increase since June 2014. This reading serves to increase the likelihood that the Federal Reserve will begin to increase short-term interest rates later this year."
There were only two key material categories that saw an increase in construction prices in March: fabricated strucutal metal produce prices (0.4%) and natural gas prices (1.5%).
While these two inputs rose, others fell:
- Prices for plumbing fixtures dropped 0.3% in March but remain up 2.5% year-over-year.
- The price of prepared asphalt, tar roofing, and siding dipped 0.4% in March.
- Iron and steel prices dropped 2.5% in March and are down 11.5% year-over-year.
- Prices for steel mill products slipped 1.9% in March and are down 4.8% on a yearly basis.
- Concrete products prices were flat but up 4.1% year-over-year.
- Crudge petroleum prices dropped 4% in March and are down 55% from the same time last year.
- Crude energy material costs decreased 1.4% in March and are down 43.7% from the previous year.
- Softwood lumed prices fell 4.1% and are down 7.4% year-over-year.
- Prices for nonferrous wire and cable were flat in March and rose 2.5% on a yearly basis.
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