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 2, 2010
A Look Back at the Navy’s First LEED Gold
Building Design+Construction takes a retrospective tour of a pace-setting LEED project.
| Nov 2, 2010
Wind Power, Windy City-style
Building-integrated wind turbines lend a futuristic look to a parking structure in Chicago’s trendy River North neighborhood. Only time will tell how much power the wind devices will generate.
| Oct 13, 2010
Prefab Trailblazer
The $137 million, 12-story, 500,000-sf Miami Valley Hospital cardiac center, Dayton, Ohio, is the first major hospital project in the U.S. to have made extensive use of prefabricated components in its design and construction.
| Oct 13, 2010
Biloxi’s convention center bigger, better after Katrina
The Mississippi Coast Coliseum and Convention Center in Biloxi is once again open for business following a renovation and expansion necessitated by Hurricane Katrina.
| Oct 13, 2010
Tower commemorates Lewis & Clark’s historic expedition
The $4.8 million Lewis and Clark Confluence Tower in Hartford, Ill., commemorates explorers Meriwether Lewis and William Clark at the point where their trek to the Pacific Ocean began—the confluence of the Mississippi and Missouri Rivers.
| Oct 13, 2010
Community center under way in NYC seeks LEED Platinum
A curving, 550-foot-long glass arcade dubbed the “Wall of Light” is the standout architectural and sustainable feature of the Battery Park City Community Center, a 60,000-sf complex located in a two-tower residential Lower Manhattan complex. Hanrahan Meyers Architects designed the glass arcade to act as a passive energy system, bringing natural light into all interior spaces.
| Oct 13, 2010
Community college plans new campus building
Construction is moving along on Hudson County Community College’s North Hudson Campus Center in Union City, N.J. The seven-story, 92,000-sf building will be the first higher education facility in the city.
| Oct 12, 2010
Holton Career and Resource Center, Durham, N.C.
27th Annual Reconstruction Awards—Special Recognition. Early in the current decade, violence within the community of Northeast Central Durham, N.C., escalated to the point where school safety officers at Holton Junior High School feared for their own safety. The school eventually closed and the property sat vacant for five years.
| Oct 12, 2010
Guardian Building, Detroit, Mich.
27th Annual Reconstruction Awards—Special Recognition. The relocation and consolidation of hundreds of employees from seven departments of Wayne County, Mich., into the historic Guardian Building in downtown Detroit is a refreshing tale of smart government planning and clever financial management that will benefit taxpayers in the economically distressed region for years to come.
| Oct 12, 2010
Gartner Auditorium, Cleveland Museum of Art
27th Annual Reconstruction Awards—Silver Award. Gartner Auditorium was originally designed by Marcel Breuer and completed, in 1971, as part of his Education Wing at the Cleveland Museum of Art. Despite that lofty provenance, the Gartner was never a perfect music venue.