The construction materials price index fell 2.8% in October matching the decline in the overall Producer Price Index. October prices were still 10.0% above a year earlier but further, although smaller, declines in the index are expected in November and possibly December. Energy and metal prices fell further from mid-October to mid-November when the survey for the next PPI report was taken.

The most significant declines last month were 18% for asphalt (at the refinery), 18% for diesel fuel (at the pump), 8% for structural steel and nonferrous pipe and tube, 7% for lumber and 6% for plywood. The drop in raw commodity prices has yet to flow through fully to processed and manufactured construction materials. Steel scrap fell 38% …