Construction materials prices rise 0.7% in January

|  February 20, 2013 |

National construction materials prices increased 0.7 percent percent in January, according to the latest Associated Builders and Contractors Producer Price Index (PPI) report. In the year between January 2012 and January 2013, materials rose 1.3 percent.

ABC Chief Economist Anirban Basu said he expects construction materials prices to remain volatile for the remainder of 2013. The report shows several non-metal product prices trending higher in January.

“We have been anticipating an increase in construction materials price volatility for several months,” Basu said. “Some of the materials experiencing instability relate more closely to residential construction. Because of the severe downturn in residential activity, a certain level of productive capacity was removed from the marketplace.”

Softwood lumber prices rose 6.7 percent and are now 24.8 percent higher than one year ago. Prices for prepared asphalt, tar roofing and siding rose 0.9 percent and are 0.7 percent higher than last January. Concrete product prices increased 0.3 percent compared to December and are 2.3 percent higher than one year ago.

“With demand for softwood lumber and other materials associated with residential construction now rising, prices also are moving higher,” Basu explained. “Moreover, increased exports to China have contributed to the recent surge in softwood lumber prices.”

Metal material prices varied in January. Nonferrous wire and cable prices edged 0.2 percent higher for the month and are up 0.2 percent year over year. Prices for plumbing fixtures and fittings were flat for the month, but are 1.3 percent higher compared to the same time last year.

Iron and steel prices decreased 0.2 percent in January and are 10.1 percent lower than the same time last year. Steel mill prices slipped 0.1 percent for the month and are 8.3 percent lower than one year ago. Prices for fabricated structural metal products were down 0.4 percent in January, but are up 0.4 percent year over year.

“The other major impetus for volatility in January was petroleum,” Basu said. “As many American consumers can attest, oil and gasoline prices have been rising recently. With the Indian and Chinese economies expected to expand more than 6 percent and 8 percent, respectively, and with part of the of the industrial world stabilizing, oil prices are not expected to fall significantly anytime soon, and they could continue their upward trajectory in the summer months.”

Crude energy materials prices increased 2.3 percent in January, driven by an 8.1 percent increase in crude petroleum prices. Year over year, crude energy materials prices are down 1.5 percent. Overall, the nation’s wholesale goods prices increased 0.2 percent in January and are 1.4 percent higher than the same time last year.

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