The Bureau of Labor Statistics recently released its producer price index (PPI) for May. An analysis by the Associated General Contractors of America showed that steel mill product prices were down 2% for the month and 11% over the previous year.
AGC Chief Economist Ken Simonson wrote that goods such as steel and concrete constitute 60% of the index (including 7% for energy); services, 40% (trade services, 25%; transportation and warehousing services, 4%; other services, 10%). The overall PPI for inputs to construction increased 0.6% from April to May. The index for energy soared 12% for the month, outweighing declines of 0.2% in the index for goods less food and energy and 0.1% in the services PPI.
The PPI for all goods used in construction declined 3% over the last 12 months. Materials important to construction that had notable one- or 12-month price changes include diesel, up 11% for the month but still down 36% over 12 months. The aforementioned steel mill products fell -2% and -11%, respectively. Steel pipe and tube were down -1.9% for the month and -9.2% for the year. Copper and brass mill shape prices were up 3.7% in May but still -3.7% for the year. Fabricated structural metal bar joists and rebar prices were up .3% and 1.3% for the last 12 months.
What this Means for Metal Buyers
Energy prices are still rising, changing the cost calculations for construction projects, yet construction materials prices remain low, allowing estimators to reduce costs.