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 | Dec 19, 2018
When it comes to economic clout, New York will far outpace other U.S. metros for decades to come
But San Jose, Calif., is expected to have the best annual growth rate through 2035, according to Oxford Economics’ latest Global Cities report.
Market Data | Dec 19, 2018
Run of positive billings continues at architecture firms
November marked the fourteenth consecutive month of increasing demand for architectural firm services.
Market Data | Dec 5, 2018
ABC predicts construction sector will remain strong in 2019
Job growth, high backlog and healthy infrastructure investment all spell good news for the industry.
Market Data | Dec 4, 2018
Nonresidential spending rises modestly in October
Thirteen out of 16 subsectors are associated with year-over-year increases.
Market Data | Nov 20, 2018
Construction employment rises from October 2017 to October 2018 in 44 states and D.C.
Texas has biggest annual job increase while New Jersey continues losses; Iowa, Florida and California have largest one-month gains as Mississippi and Louisiana trail.
Market Data | Nov 15, 2018
Architecture firm billings continue to slow, but remain positive in October
Southern region reports decline in billings for the first time since June 2012.
Market Data | Nov 14, 2018
A new Joint Center report finds aging Americans less prepared to afford housing
The study foresees a significant segment of seniors struggling to buy or rent on their own or with other people.
Market Data | Nov 12, 2018
Leading hotel markets in the U.S. construction pipeline
Projects already under construction and those scheduled to start construction in the next 12 months, combined, have a total of 3,782 projects/213,798 rooms and are at cyclical highs.
Market Data | Nov 6, 2018
Unflagging national office market enjoys economic tailwinds
Stable vacancy helped push asking rents 4% higher in third quarter.
Market Data | Nov 2, 2018
Nonresidential spending retains momentum in September, up 8.9% year over year
Total nonresidential spending stood at $767.1 billion on a seasonally adjusted, annualized rate in September.