Construction materials prices fell 0.2 percent in October and are down 0.3 percent year over year, according to the Nov. 21 Producer Price Index released by the Department of Labor. Nonresidential construction materials are down 0.5 percent for the month and are unchanged from the same time one year ago.
“We continue to observe a lack of significant inflationary pressures both globally and nationally,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Despite ongoing expressions of concern regarding inflation due to stimulus measures being conducted by the U.S. Federal Reserve and other major central banks around the world, the data continue to reflect remarkable stability in construction materials prices.”
Overall, the nation’s wholesale goods prices expanded 1 percent in October and are up 2 percent year over year. “Inflation as measured by the Producer Price Index and other indices remains well within Federal Reserve tolerances, suggesting that the institution’s bond purchasing program is likely to remain fully intact for now,” said Basu.
“However, there is no guarantee that the stability of materials prices will persist,” Basu said. “The situation in Iran appears to be heating up and that could ultimately translate into commodity supply interruptions, boosting prices in the process. Moreover, U.S. economic growth is expected to accelerate next year, which, all things being equal, tends to push input costs higher.”
The following materials prices increased in October:
- Fabricated structural metal product prices are up 0.4 percent and have risen 0.4 percent on a year-over-year basis.
- Softwood lumber prices climbed 1.2 percent and are 16.2 percent higher than one year ago.
- Natural gas prices expanded 0.2 percent and are 15.3 percent higher than one year ago.
- Concrete products edged up 0.1 percent and are up 2.9 percent on a yearly basis.
A number of key construction inputs did not experience price increases in October.
- Nonferrous wire and cable prices fell 0.7 percent on a monthly basis and are down 3.4 percent from October 2012.
- Prices for plumbing fixtures and fittings were unchanged for the month and are up just 1.5 percent on a year-over-year basis.
- Prices for prepared asphalt, tar roofing and siding declined 1.6 percent for the month and are only 1 percent higher than a year ago.
- Iron and steel prices are unchanged on both a monthly and annual basis.
- Crude petroleum prices fell 5.2 percent for the month, but are up 7.5 percent from October 2012.
- Crude energy prices fell 3.6 percent for the month, but are 7.3 percent higher year over year.
- Steel mill products prices remained unchanged and are 2.4 percent lower than one year ago.