Construction input prices expanded by 0.7% in May and have now expanded for three consecutive months according to an analysis of the Bureau of Labor Statistics Producer Price Index released by Associated Builders and Contractors (ABC). The rise follows eight consecutive months during which construction input prices fell; prices remain 3.4% below their year-ago level.
Nonresidential construction input prices expanded by 0.9% in May, but are still 3.5% below their year-ago level. Price gains were largely driven by iron and steel prices and steel mill product prices, which expanded 5.8% and 4.6% for the month, respectively.
"After falling sharply during all of 2015 and into the early months of 2016, an increase in global commodities prices had to happen as markets firmed," said ABC Chief Economist Anirban Basu. "While much attention has been given to the recent rise in oil prices to around $50 per barrel, other commodity prices have also experienced a resurgence, including iron ore.
"That said, the global economy continues to disappoint relative to expectations established at the start of the year," said Basu. "Higher prices may stimulate new rounds of production, including in energy markets, but the implication is that prices are unlikely to rise smoothly or dramatically going forward. Analyst views regarding the direction of commodity prices diverge wildly. While supply and demand play a role in fashioning commodity prices, so too does the value of the U.S. dollar. U.S. interest rates remain low and in many cases have been declining. The dollar has correspondingly weakened in recent weeks. Should that continue, commodity price increases could be sharper than we presently anticipate."
Nine key input prices expanded or remained unchanged in May on a monthly basis:
- Crude petroleum prices expanded 0.6% from April 2016, but are down 32.5% from May 2015.
- Unprocessed energy material prices expanded 0.9% on a monthly basis, but have fallen 23.1% on a year-ago basis.
- Prices for steel mill products expanded 4.6% from a month ago, but are down 5.2% on a yearly basis.
- Iron and steel prices expanded 5.8% month-over-month, but are down 2% year-over-year.
- Softwood lumber prices expanded 2.2% for the month and 6.3% from May 2016.
- Fabricated structural metal prices remained unchanged month-over-month and are down 1.9% year-over-year.
- Prices for plumbing fixtures and fittings expanded 0.2% for the month and are up 0.3% from the same time last year.
- Prices for prepared asphalt and tar and roofing and siding products expanded by 0.4% month-to-month and 0.7% year-over-year.
- Natural gas prices rose 2.9% for the month, but are down 23.5% from the same period one year ago.
Two key input prices declined on a monthly basis:
- Nonferrous wire and cable prices fell 1.3% on a monthly basis and have fallen 9.2% on a yearly basis.
- Concrete product prices inched down by 0.1% month-over-month, but are up 3% year-over-year.
Related Stories
| Nov 22, 2013
Health Product Declaration Collaborative to develop protocol for third-party verification of HPDs
Seven leading product sustainability assessment companies partner with the HPD Collaborative to develop the verification and quality assurance protocols.
| Nov 19, 2013
Top 10 green building products for 2014
Assa Abloy's power-over-ethernet access-control locks and Schüco's retrofit façade system are among the products to make BuildingGreen Inc.'s annual Top-10 Green Building Products list.
| Nov 18, 2013
USGBC, UL Environment announce joint Environmental Product Declaration
Strategic partnership between U.S. Green Building Council and UL Environment will focus on building materials and product transparency.
| Nov 15, 2013
Metal makes its mark on interior spaces
Beyond its long-standing role as a preferred material for a building’s structure and roof, metal is making its mark on interior spaces as well.
| Nov 14, 2013
Behind the build: BD+C's 'Pedia-Pod' modular pediatric patient unit at Greenbuild 2013 [slideshow]
Next week at Greenbuild, BD+C will unveil its demonstration pediatric patient unit, called Pedia-Pod. Here's a behind-the-scenes look at the construction of this unique modular structure.
| Nov 8, 2013
Walkable solar pavement debuts at George Washington University
George Washington University worked with supplier Onyx Solar to design and install 100 sf of walkable solar pavement at its Virginia Science and Technology Campus in Ashburn, Va.
| Nov 4, 2013
New DOE code changes require improved energy efficiency in commercial construction
Outsulation by Dryvit incorporates continuous insulation and a seamless air/water-resistive barrier, which meets new code requirements
| Oct 18, 2013
Researchers discover tension-fusing properties of metal
When a group of MIT researchers recently discovered that stress can cause metal alloy to fuse rather than break apart, they assumed it must be a mistake. It wasn't. The surprising finding could lead to self-healing materials that repair early damage before it has a chance to spread.
| Oct 15, 2013
Sustainable design trends in windows, doors and door hardware [AIA course]
Architects and fenestration experts are looking for windows and doors for their projects that emphasize speed to the project site, a fair price, resilient and sustainable performance, and no callbacks.