Construction materials prices rise in May after seven month decline
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RSS FeedThe construction materials price index increased 0.6% in May after declining 10.0% over the previous seven months. Small monthly gains or losses are expected for a few more months before a sustained price rise begins. Asphalt (at the refinery) increased 8.6%, diesel fuel 4.4% and concrete block 3.8%. The major Price declines in May were for nonferrous pipe and tube (-5.3%), builders hardware (-3.5%), gypsum products (-2.4%) and structural steel (-1.3%).
Both diesel and asphalt prices have not yet caught up with $70.00/bbl. crude oil so further price rises are ahead although diesel prices have not increased since the last price survey. The drop in builders’ hardware is more due to depressed manufacturers sales and overstocked inventory than to lower metal prices. Further declines are likely but well short of the large May decline. The structural steel price trend is about to turn even though contractor demand will continue to decline slowly for the rest of the year. Capacity has been shuttered and inventories reduced so mills are now beginning ask for price increases. The anticipated pickup in rolled steel demand in the auto industry will help make the higher prices requested stick.
US construction supplies production is declining faster than construction activity, signaling that aggressive inventory reduction is underway. This will contribute to weak pricing well into the year.
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 RSMeans.
Construction Materials Inflation – May 2009
| Percent Change in… | ||||
| 1 month | 3 months | 12 months | 3 years | |
| Construction Commodities | ||||
| Dimension Stone | 1.9 | 3.6 | 6.2 | 10.3 |
| Cement | 0.0 | 0.9 | 0.5 | 6.2 |
| Asphalt Paving Mixtures and Blocks | 8.6 | 20.8 | -12.4 | 17.9 |
| Construction Sand, Gravel & Crushed Stone | -0.1 | 0.5 | 5.2 | 22.3 |
| Softwood Plywood | -0.7 | -4.8 | -17.7 | -16.8 |
| Hardwood Lumber | 0.5 | -2.8 | -9.6 | -14.3 |
| Softwood Lumber | -2.1 | -4.0 | -18.4 | -35.6 |
| Other Commodities | ||||
| Industrial Natural Gas | -6.5 | -15.8 | -33.4 | -18.0 |
| Plastic Resins & Materials | -0.2 | -1.3 | -13.3 | -3.7 |
| Insulation Materials | -1.3 | -1.2 | 1.8 | -5.9 |
| Iron & Steel Scrap | 18.8 | -3.8 | -63.1 | -20.2 |
| Iron Ore | 0.0 | 0.0 | 5.4 | 12.9 |
| Copper Ores | 18.4 | 36.0 | -39.8 | -12.8 |
| Copper Base Scrap | 7.5 | 49.5 | -38.6 | -21.9 |
| Manufactured Materials | ||||
| Gypsum Products | -2.4 | -2.5 | 4.2 | -22.3 |
| Diesel Fuel | 4.4 | 14.6 | -58.1 | -30.4 |
| Asphalt Roofing | 1.1 | -6.7 | 40.4 | 57.0 |
| Paint | 0.0 | 0.1 | 12.4 | 21.8 |
| Plastic Construction Products | -0.1 | -0.5 | 1.5 | 1.9 |
| Vitreous Plumbing Fixtures | 0.0 | 2.3 | 4.2 | -1.9 |
| Ceramic Tile | -0.7 | -0.9 | 1.0 | 4.0 |
| Flat Glass | -0.3 | -1.5 | 1.2 | 2.2 |
| Fabricated Building Steel | -1.8 | -2.4 | -6.6 | 8.8 |
| Hot rolled bars, plates & structural shapes | -1.3 | -14.3 | -33.9 | -5.3 |
| Extruded Aluminum rod, bar and other shapes | 1.2 | 0.0 | -24.1 | -19.6 |
| Architectural Metalwork | -1.2 | -2.1 | 6.5 | 23.1 |
| Metal Plumbing Fixtures | 0.0 | 0.8 | 1.9 | 12.7 |
| Builders' Hardware | -3.5 | -3.1 | 1.2 | 16.0 |
| Sheet Metal Products | -0.9 | -3.3 | -3.1 | 7.8 |
| Steel Pipe and Tube | -1.6 | -12.0 | -15.8 | 5.6 |
| Nonferrous Pipe and Tube | -5.3 | 13.3 | -32.9 | -20.5 |
| Building Brick | 0.2 | -0.5 | 0.2 | 1.3 |
| Ready Mix Concrete | -0.1 | -1.9 | 2.8 | 10.1 |
| Concrete Block & Brick | 3.8 | 2.9 | 6.6 | 13.9 |
| Prestressed Concrete | -2.4 | -3.8 | -4.7 | -0.7 |
| Precast Concrete Products | 1.3 | 1.2 | 1.7 | 12.0 |
| Concrete Pipe | -0.9 | -0.7 | 2.7 | 16.7 |
| Wood Kitchen Cabinets | -0.1 | 0.3 | 1.7 | 6.3 |
| Millwork (window,door, cabinet) | -0.1 | 0.0 | 1.2 | 5.0 |
| Engineered Wood Products | -0.1 | -0.6 | -3.8 | -14.6 |
| Laminated Plastics | -0.6 | -0.7 | 1.0 | 4.0 |
| Assembled Equipment | ||||
| Hand and Edge tools | 0.2 | 0.2 | 5.5 | 11.0 |
| Power Hand Tools | 0.1 | -0.1 | 0.9 | 4.6 |
| Appliances | -0.4 | 0.2 | 5.5 | 7.3 |
| Furnaces | -0.1 | 0.2 | 3.2 | 11.9 |
| Construction Machinery | -0.2 | -0.2 | 4.2 | 8.9 |
| Construction Machinery Rental (incl. oilfield equip.) | 0.4 | 0.7 | -0.9 | 7.9 |
| Trucks over 14,000 Ibs. GVW | 0.5 | 0.4 | 4.7 | 12.5 |
| Metal Doors, Sash and Trim | 0.0 | 0.9 | 4.4 | 8.8 |
| Summary | ||||
| Construction Materials (commodity level) | -0.4 | -2.4 | -5.0 | 3.2 |
| Inputs to Construction Industries | 0.6 | -0.4 | -5.5 | 5.7 |
| Inputs to NR Construction | 1.1 | 0.2 | -7.3 | 5.9 |
| Inputs to SF Construction | 0.1 | -0.9 | -1.1 | 5.9 |
| Inputs to MF Construction | 0.2 | -0.7 | -3.9 | 5.4 |
| Inputs to Highway & Street Const. | 2.1 | 0.9 | -10.8 | 7.6 |
| Inputs to Other Heavy Construction (indexes incl. instalation and overhead) |
0.8 | -0.3 | -10.6 | 5.5 |
| New Warehouse Building Construction | -0.4 | -0.8 | 5.7 | 25.6 |
| New School Construction | 0.0 | 0.4 | 11.8 | 20.9 |
| New Office Construction | 0.3 | -0.5 | 6.3 | |
| Production Index: Construction Supplies | -1.0 | -5.2 | -21.5 | -26.7 |
| Retail Sales: Building & Equipment Supplies | -2.7 | 0.1 | -10.5 | -14.0 |
Source: Producer Price Index, Bureau of Labor Statistics,
US Department of Labor, Federal Reserve Board, Census Bureau
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