Construction Materials Prices Rise 0.1 Percent in December

Construction materials prices expanded just 0.1 percent in December and are up 1.3 percent year over year, according to a January 15 Producer Price Index released by the Department of Labor. Nonresidential construction materials prices also rose only 0.1 percent for the month and are 1 percent higher than the same time one year ago.

“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis,” says Associated Builders and Contractors (ABC) chief economist Anirban Basu. “That said, there was some volatility in individual input segments, including natural gas prices, which were up 7.8 percent, and crude petroleum, which was up 7.1 percent.”

He adds, “These increases are at least partially explained by seasonal factors and do not likely foreshadow aggressive price increases going forward. At the same time, certain input prices fell, including softwood lumber, down 3.3 percent, and nonferrous wire/cable, down 1.4 percent.”

Overall, the nation’s wholesale goods prices expanded 0.4 percent in December and are up 1.2 percent year over year.

“While there is never a guarantee of input price stability, for now things seems reasonably calm,” Basu says. “The world economy is anticipated to accelerate this year to 3.6 percent growth, up from closer to 3 percent last year. That will help push the level of demand for construction materials higher, but not necessarily in ways that are especially damaging to a still-benign U.S. nonresidential construction industry outlook.”