Construction Forecasts

News & Analysis

Construction Materials Price Index Rises 0.9% in May

06/20/2011 by Jim Haughey, RCD Chief Economist

Construction materials price inflation weakened again in May with the month to month price change falling to 0.9% from 1.4% in April and 2.0% in March. Price cuts for diesel fuel, lumber and copper and much lower price rises for steel products account for the slowdown in the materials price index. The flip side of slowing inflation is that abrupt price cuts in price sensitive commodities typically come from reduced demand and not increased supply. Materials price inflation is likely to slow further in June based on price trends for diesel and lumber since the price survey in the second week of May.

The significant price increases in May were gypsum products (4.3%), aluminum (3.3%) and plastics construction products (1.8%). The gypsum price rise is largely due to aggressive pricing to rebuild margins and not to a recent rise in product demand. Further substantial price increases are not likely in the next few months. The aluminum price increase was a slowdown in inflation from earlier this year. This slowdown will probably continue for a few more months. Prices have already dropped for steel and non ferrous metals. The price increase for plastics construction products was a sharp uptick in response to higher oil and natural gas input prices. A few more months of 1% plus inflation are likely following the 4.6% jump in plastic resin prices in May.

The exchange value of the dollar has risen recently with the flare up of the Greek debt crisis which weakened the value of the euro currency. This turnabout could be brief if the crisis subsides with Greek acceptance of an austerity program and the second round of European and IMF loans. Or the rise in the dollar could persist if Greece edges closer to default. In this case, commodity import prices will weaken substantially. The construction materials price index will briefly weaken below the inflation pace in the overall economy. That said, materials buyers should nonetheless expect price inflation in the 5-7% range through 2012, well above inflation in the overall economy.

US Construction-Related Price Indexes – May 2011

  Percent Change versus...
  3 years
ago
year
ago
3 months
ago
previous
month
Construction Commodities  
Dimension Stone 10.5 1.8 0.2 0.9
Cement -8.5 -1.3 1.9 0.3
Construction Sand, Gravel & Crushed Stone 7.9 1.6 0.0 0.2
Softwood Plywood -2.0 -15.1 3.0 -0.7
Hardwood Lumber -0.4 -1.5 -0.6 -0.6
Softwood Lumber -3.3 -12.4 -3.1 -2.5
Other Commodities  
Industrial Natural Gas -37.5 -3.9 -10.2 -8.1
Plastic Resins & Materials 9.8 12.8 8.1 4.6
Insulation Materials 10.3 6.8 -0.1 -0.5
Iron & Steel Scrap -17.4 11.5 -3.3 -2.2
Iron Ore 11.3 15.7 5.4 5.4
Copper Ores 11.8 13.0 -0.8 -0.2
Copper Base Scrap 7.3 16.6 -0.5 -4.7
Manufactured Materials  
Gypsum Products 1.2 -0.9 6.2 4.3
Diesel Fuel -17.4 39.6 13.8 -3.2
Asphalt Roofing 47.9 -0.3 2.6 2.7
Paint 14.9 6.3 1.2 0.0
Plastic Construction Products 9.0 3.8 3.5 1.8
Vitreous Plumbing Fixtures 7.1 0.8 0.6 0.0
Ceramic Tile 1.3 0.3 0.8 1.6
Flat Glass -2.0 1.8 -0.1 0.0
Fabricated Building Steel -8.8 3.1 0.2 0.3
Hot rolled bars, plates & structural shapes -6.7 10.6 5.1 0.7
Extruded Aluminum rod, bar and other shapes -3.9 10.9 6.7 3.3
Architectural Metalwork 11.6 4.8 4.1 0.2
Metal Plumbing Fixtures 5.2 2.6 -1.3 0.7
Builders' Hardware 7.8 2.3 0.9 0.8
Sheet Metal Products 5.8 6.8 3.8 1.1
Steel Pipe and Tube 13.3 13.8 4.7 -0.4
Nonferrous Pipe and Tube 7.1 19.4 -9.8 -3.6
Building Brick -3.9 -3.0 -0.8 0.1
Ready Mix Concrete -0.5 -0.9 -0.3 -0.2
Concrete Block & Brick 2.3 0.1 0.6 0.0
Prestressed Concrete -7.6 -3.1 -4.8 -0.2
Precast Concrete Products 4.2 1.7 1.2 0.2
Concrete Pipe -2.0 1.4 -0.1 -0.1
Wood Kitchen Cabinets 3.8 2.0 1.8 0.0
Millwork (window, door, cabinet) 2.6 1.2 1.2 0.2
Engineered Wood Products 2.0 -0.5 0.4 -0.5
Laminated Plastics 3.1 2.6 1.4 0.1
Assembled Equipment  
Hand and Edge tools 5.4 0.7 0.9 0.4
Power Hand Tools 1.8 1.3 0.6 1.0
Appliances 4.7 0.5 0.2 0.0
Furnaces 3.7 1.7 0.7 0.5
Construction Machinery 6.9 2.8 0.6 0.3
Construction Machinery Rental (incl. oilfield equip.) -4.4 1.3 -0.1 -2.9
Trucks over 14,000 Ibs. GVW 10.5 3.8 0.9 1.1
Metal Doors, Sash and Trim 8.5 5.0 2.4 0.7
Summary  
Construction Materials (commodity level) 3.2 1.6 2.2 0.5
Inputs to Construction 8.0 7.5 4.4 0.9
Inputs to Residential Construction 10.0 6.0 3.5 0.7
Inputs to Commercial Construction n/a n/a 3.8 0.8
Inputs to Industrial Construction n/a n/a 4.0 0.8
Inputs to Heavy Construction
   (indexes incl. instatlation and overhead)
n/a n/a 5.8 1.4
New Warehouse Building Construction 2.5 1.7 0.8 0.0
New School Building Construction 11.8 1.7 1.0 0.0
New Office Construction 3.2 1.5 0.8 0.0
Production Index: Construction Supplies -19.9 3.0 0.4 -0.1
Retail Sales: Building & Equipment Supplies  -5.4 -3.7 1.6 0.1

Source: Producer Price Index, Bureau of Labor Statistics,
US Department of Labor, Federal Reserve Board, Census Bureau


Email

RSS Feed

» return to previous page
10451

Member Comments

Post Your Own Comments 
» Not a member? Register now to become one. Otherwise, login to post your comments on this article.

click here to update your log-in and member information

click here to maintain your company profile & view metrics

Join accessArchitecture Now!
accessArchitecture members get free pre-design leads in exchange for providing project information
Keep Up To Date with eNewsletters
Keep up to date with our variety of complimentary weekly and monthly eNewsletters covering the construction industry.