Construction Material Prices Fall Further in October

by Jonathan McGaha | 12 November 2015 12:00 am

The Producer Price Index[1] for inputs to construction industries declined for a fourth consecutive month in October, according to an analysis of the Bureau of Labor Statistics[2] data released today by Associated Builders and Contractors (ABC)[3]. The index stands at its lowest level since the first quarter of 2011 as prices for construction inputs declined 0.2 percent on a monthly basis and 4.6 percent on a year-ago basis. Nonresidential construction input prices exhibit a similar pattern, falling 0.3 percent since last month and 5.1 percent over the past twelve months. Nine of 11 key input prices are down on a year-over-year basis.

“The dollar has continued to increase in value into November against a variety of globally important currencies, including the euro, yen and Canadian dollar,” said ABC Chief Economist Anirban Basu. “Commodity prices, including oil and copper, continue to plummet largely as a result of the strong dollar, though weaker than anticipated economic performance in key emerging nations is also playing a part, including in China, Russia and Brazil. Unless this changes over the course of November’s final two and a half weeks, November will represent a fifth consecutive month of construction industry input price declines.”

Six key input prices rose or remained unchanged in October on a monthly basis, while one remained unchanged:

• Crude petroleum prices expanded by 8.2 percent in October, but are down 43.6 percent from the same time last year.
• Crude energy materials prices grew by 3 percent in October, but are still down 33.4 percent on a yearly basis.
• Softwood lumber prices rose by 1.6 percent on a monthly basis, but are down 9 percent on a yearly basis.
• Fabricated structural metal product prices ticked up 0.2 percent in October, but are down 0.6 percent from one year ago.
• Plumbing fixtures and fittings prices inched up 0.1 percent for the month and are up 1.2 percent from October 2014.
• Nonferrous wire and cable prices increased by 0.1 percent on a monthly basis but fell 7.4 percent on a yearly basis.
• Concrete product prices were unchanged from September and have expanded 2.6 from the same time last year.

Four key input prices fell in October on a monthly basis:

• Prepared asphalt, tar roofing, and siding prices dipped 0.3 percent for the month and are down 2.4 percent for the year.
• Steel mill product prices fell 1.7 percent in October and are 16.1 percent lower than one year ago.
• Natural gas prices shrank 1.8 percent on a monthly basis and 36 percent on a yearly basis.
• Iron and steel prices lost 4.4 percent month-over-month and 21.2 percent year-over-year.

To view the previous PPI report, click
here.

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