Federico Rostagno/Adobe Stock
Construction input prices fell for the eighth consecutive month during February 2016 according to an analysis of the Bureau of Labor Statistics Producer Price Index released last week by the Associated Builders and Contractors of America.
Construction input prices fell 0.6% on monthly basis in February and 3.7% on a yearly basis. Inputs to non-residential construction fell even further, declining 0.7% from January 2016 and 3.8% from February 2015. Prices for eight of the 11 key inputs declined on a monthly basis in February, while nine of the 11 key inputs experienced year-over-year price declines.
“Weak global growth and the prospect of a strengthening U.S. dollar have helped suppress commodity and, therefore, material prices,” said ABC Chief Economist Anirban Basu. “The February PPI data do not reflect the more recent increases in various commodity prices, ranging from oil to iron ore, and it is quite likely that in construction materials prices will rebound some in March. However, a significant run up in prices is unlikely in the coming months as little has changed to support stronger commodity prices.”
Three key input prices the ABC tracks expanded in February on a monthly basis:
- Prices for prepared asphalt and tar and roofing and siding products increased by 0.5% from January 2016 but are down 1.5% from February 2015.
- Concrete product prices expanded by 0.3% month-over-month and 2.5% year-over-year.
- Natural gas prices rose 1.1% for the month but are down 22.3% from the same time last year.
Eight key input prices declined on a monthly basis:
- Crude petroleum prices fell 9% from January 2016 and were down 48.5% from February 2015.
- Unprocessed energy material prices fell 3.2% on a monthly basis and 28.8% on a yearly basis.
- Fabricated structural metal prices products fell 0.5% month-over-month and 2.4% year-over-year.
- Prices for steel mill products fell 1% on a monthly basis and are down 17.7% on a yearly basis.
- Prices for plumbing fixtures and fittings fell 0.2% for the month but are up 0.3% from the same time last year.
- Non-ferrous wire and cable prices fell 4% on a monthly basis and 8.4% on a yearly basis.
- Iron and steel prices fell 0.3% month-over-month and have declined 17.6% year-over-year.
- Softwood lumber prices fell 0.4% for the month and 6.4% from the same time last year.