Construction material prices fell for the sixth consecutive month in December, losing 1.2% on a monthly basis and 4% on a yearly basis according to an analysis of the Bureau of Labor Statistics Producer Price Index released by Associated Builders and Contractors (ABC).
Construction input prices have fallen 7.2% since peaking in August 2014, and have fallen in 11 of the previous 16 months. Nonresidential construction input prices exhibited similar declines, falling 1.1% for the month and 4% for the year.
"Construction input prices continued to sink to the end of 2015, due in large measure to global deflationary forces that have become increasingly apparent," said ABC Chief Economist Anirban Basu. "The World Bank predicts that the global economy will expand by less than 3% in 2016, very limited growth by historic standards. Last year, the global economy expanded by just 2.4%, with significant weakness recorded in much of the emerging world. Like last year, major emerging nations like Russia and Brazil are anticipated to be in recession.
"In addition, the U.S. dollar remains strong," Basu said. "With only a couple of exceptions, the U.S. is the only major nation to increase interest rates. If interest rates rise as anticipated, the dollar will strengthen further in 2016, placing additional downward pressure on input prices. Even significant geopolitical events involving oil producing nations has not been enough to stem the decline in oil or other commodity prices."
Only four key input prices expanded in December on a monthly basis:
- Natural gas prices expanded 5.2% month-over-month but are down 46.5% year-over-year.
- Prices for prepared asphalt and tar roofing and siding products rose 1% on a monthly basis but are down 2% on a yearly basis.
- Concrete product prices ticked 0.3% higher from November and are up 3% from the same time one year ago.
- Fabricated structural metal product prices inched 0.1% higher for the month but are 0.9% lower than at the same time one year ago.
Seven key input prices fell in December on a monthly basis:
- Crude petroleum prices plunged 16% month-over-month and are 43.3% lower year-over-year.
- Crude energy materials prices fell 5.7% for the month and are down 35.8% for the year.
- Softwood lumber prices shed 2.9% from November and are 6.8% lower than at the same time one year ago.
- Steel mill product prices dipped 2.7% for the month and 19.8% for the year.
- Prices for nonferrous wire and cable fell 2.7% on a monthly basis and are down 9.9% on a yearly basis.
- Iron and steel prices are down 2.2% for the month and 23.7% for the year.
- Prices for plumbing fixtures and fittings fell 0.5% month-over-month but expanded 1.3% year-over-year.
Related Stories
Market Data | Aug 18, 2020
July architectural billings remained stalled
Clients showed reluctance to sign contracts for new design projects during July.
Market Data | Aug 18, 2020
Nonresidential construction industry won’t start growing again until next year’s third quarter
But labor and materials costs are already coming down, according to latest JLL report.
Market Data | Aug 18, 2020
6 must reads for the AEC industry today: August 18, 2020
The world's first AI-driven facade system and LA's Greek Theatre restoriation completes.
Market Data | Aug 17, 2020
5 must reads for the AEC industry today: August 17, 2020
5 strategies for creating safer hotel experiences and how to manage multifamily assets when residents no longer leave.
Market Data | Aug 14, 2020
6 must reads for the AEC industry today: August 14, 2020
The largest single sloped solar array in the country and renewing the healing role of public parks.
Market Data | Aug 13, 2020
5 must reads for the AEC industry today: August 13, 2020
Apple Central World opens in Bangkok and 7-Eleven to buy Speedway.
Market Data | Aug 12, 2020
6 must reads for the AEC industry today: August 12, 2020
UC Davis's new dining commons and the pandemic is revolutionizing healthcare benefits.
Market Data | Aug 11, 2020
6 must reads for the AEC industry today: August 11, 2020
Elevators can be a 100% touch-free experience and the construction industry adds 20,000 employees in July.
Market Data | Aug 10, 2020
Dodge Momentum Index increases in July
This month’s increase in the Dodge Momentum Index was the first in all of 2020.
Market Data | Aug 10, 2020
Construction industry adds 20,000 employees in July but nonresidential employment dips
Association warns skid will worsen without new relief.