The largest monthly gain in petroleum prices in over three years caused construction materials prices to expand 0.4 percent in February, ending a six-month streak when prices failed to rise, according to the March 13 producer price index release by the Bureau of Labor Statistics. On a year-over-year basis, construction input prices fell 3.9%. Nonresidential construction input prices also rose 0.4% on a monthly basis and were down 4.9% on a yearly basis.
"While conventional wisdom suggests that oil and natural gas prices will eventually rise, the adjustment period could be a lengthy one and although crude petroleum prices were up 12.3% on a monthly basis, this is likely a function of an abnormally cold February," said Associated Builders and Contractors Chief Economist Anirban Basu. "This rise is the first monthly gain since April 2014 and the eighth consecutive month in which petroleum prices were down on a year-over-year basis.
"For now, inventories of fuel remain elevated and most believe that the U.S. dollar's upward movement is not at an end," said Basu. "This, in addition to the quantitative easing that has begun in Europe and the potential for increasing interest rates in America, means that there is likely to be greater demand for U.S. fixed income assets, which will serve to further strengthen the U.S. dollar and put downward pressure on certain key construction input prices. This dynamic was widely apparent in February, during which prices for seven of the 11 key construction inputs failed to rise and no input other than crude petroleum increased in excess of one percent."
The following materials prices increased in February:
- Nonferrous wire and cable prices grew 0.8% on a monthly basis but fell 4.4% on a yearly basis
- Crude petroleum prices gained 12.3% in February but are down 53.4% from the same time last year.
- Crude energy materials prices expanded 0.9% in February but are 45% lower year-over-year.
- Concrete products prices expanded 0.2% in February and are up 4.3% on a yearly basis.
Seven of the 11 key construction inputs did not expand for the month:
- Prices for plumbing fixtures fell 0.1% in February but are up 3.0% on a year-over-year basis.
- Fabricated structural metal product prices remained flat for the month and have expanded 1.0% on a year-over-year basis.
- Prices for prepared asphalt, tar roofing, and siding fell 1.4% for the month but are up 1.7% on a year-ago basis.
- Iron and steel prices fell 5.4% in February and are down 10.6% from the same time last year.
- Steel mill products prices fell 1.8% for the month and are 3.6% lower than one year ago.
- Softwood lumber prices fell 3.7% in February and are 4.4% lower than one year ago.
- Natural gas prices fell 11.2% in February and are down 51.8% from one year ago.
Related Stories
Building Team | Jan 6, 2017
CannonDesign launches REALIZE Life Safety Solutions
“The Final Rule presents a considerable update to the life safety directives most healthcare systems have become accustomed to,” says Joe Cassata, principal at CannonDesign.
Building Team | Jan 3, 2017
How does your firm’s hit rate stack up to the AEC competition?
If your firm is not converting at least a third of project proposals when competing for new work, it may be time to reassess your marketing tactics and processes.
Building Team | Dec 30, 2016
An open letter to the AEC C-suite
Women AEC professionals need you to take action.
Building Team | Dec 14, 2016
Hackathons set the stage at events for women in AEC and BD+C Under-40s
Popular among engineers, hackathons are forums that encourage “constructive collision” by bringing people into a room, letting them self-organize around common interests and goals, and having them work together in groups over two or three consecutive days to devise workable inventions that fill identifiable needs.
Building Team | Dec 14, 2016
Will Trump-led America be a boon or bust for U.S. AEC firms?
Regardless of which side of the aisle you stand on, election night was a jaw-dropping moment.
Building Team | Dec 8, 2016
The NYC Public Design Commission recognizes 12 projects with its 2016 Excellence in Design Award
2016 marked the 34th year the Public Design Commission has handed out its Excellence in Design Awards.
Building Team | Dec 2, 2016
Alexandria Real Estate Equities becomes first real estate investment trust to be named a First-in-Class Fitwel Champion
Fitwel building certification was developed to foster positive impacts on building occupant health and productivity through improvements to workplace design and policies.
Building Team | Nov 15, 2016
Major architecture firms are flocking to Dubai’s Design District
Three more major firms are making a permanent home in Dubai.
Architects | Nov 11, 2016
Six finalists selected for London’s Illuminated River competition
The competition is searching for the best design for lighting the bridges of central London.
Building Team | Nov 7, 2016
Taking cues from nature: How biomimicry can drive ROI for hoteliers
Biomimicry takes inspiration from nature’s form, processes, and ecosystems to solve human problems. This design method, which incorporates lessons learned from nature, can constantly morph in response to new challenges in our environments, writes Gensler's Lorraine Francis.