Construction material costs fall after three-month rise

by Wally Northway

Published: July 16,2010

Tags: construction

Following three months of increases, the price of construction materials and supplies in June fell 0.9 percent, according to the July 15 producer price index (PPI) report by the U.S. Labor Department. However, prices are up 0.8 percent for the second quarter of the year and are 4.2 percent higher from June 2009.

Most commodities tracked by Associated Builders and Contractors (ABC) posted decreases for the month. Iron and steel prices were down 2 percent in June, but are still up 3.8 percent for the second quarter and up 34.2 percent on a year-over-year basis. Similarly, steel mill product prices were down 1.3 percent last month, but are 2.1 percent higher for the quarter and up 30.5 percent from the same time last year. Nonferrous wire and cable prices were down 2 percent for the month and 2.1 percent lower for the quarter, but are still up 13.6 percent over the past twelve months.

Prices for prepared asphalt, tar roofing and siding fell 2.4 percent for the month, up 1.4 percent for the quarter, and down 0.6 percent from June 2009. Prices for concrete products dipped 0.2 percent for the month, were unchanged for the second quarter, and are down 2 percent from the same time last year. Softwood lumber prices were down 9 percent for the month, the largest monthly decrease since 1980. Because this was the first decrease in producer prices for softwood lumber since October 2009, prices were down just 1.3 percent for the quarter, but are 21.9 percent higher year-over-year.

Producer prices for plumbing fixtures inched up 0.2 percent in June, but remained unchanged for the quarter and are up 0.9 percent from June 2009. Prices for fabricated structural metal products were up slightly at 0.1 percent for the month, up 1.6 percent for the quarter and are 1.3 percent higher from the same time last year.

A 2.7 percent spike in natural gas prices caused crude energy prices to increase 1.7 percent last month. Crude energy prices are down 9.2 percent for the quarter, but are 6.4 percent higher from June 2009. Overall, the nation’s wholesale prices dipped 0.5 percent in June, while core finished goods prices – minus food and energy – were up 0.1 percent, the eighth straight monthly increase. Year-over-year, finished goods prices are up 2.8 percent.

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