Materials price inflation weakened in June following the abrupt drop in demand for materials by homebuilders adjusting to a lower level of demand in their market. Materials inflation is expected to be significantly weaker this summer than over the past year because price increases at the commodity level have been very modest for several months.
Cement prices were steady in June and gypsum prices fell.These materials had been the principal inflation problems earlier in the year. Nonferrous metals and oil based products such as diesel fuel are currently the major inflation worry.Both of these are near their peak prices but little price pullback is expected this year.Ominously, steel prices are now rising again but this is not a repeat of the demand driven price surge in 2004.The recent price rises are simply the up side of a brief inventory cycle.
| Construction Materials Price Index % Change in… | |||
| 12 months | 3 months | 1 month | |
| Construction Commodities | |||
| Dimension Stone | 1.6 | 0.3 | -0.4 |
| Cement | 14.5 | 1.2 | 0.0 |
| Construction Sand, Gravel & Crushed Stone | 8.0 | 1.1 | -0.1 |
| Softwood Plywood | -14.6 | -7.5 | -3.8 |
| Hardwood Lumber | 0.8 | 0.9 | 0.1 |
| Softwood Lumber | -7.3 | -6.0 | -6.8 |
| Other Commodities | |||
| Industrial Natural Gas | 3.0 | -12.2 | -6.7 |
| Plastic Resins & Materials | 6.8 | -2.0 | 1.3 |
| Insulation Materials | 6.5 | 0.3 | -0.2 |
| Iron & Steel Scrap | 73.7 | 12.6 | 3.2 |
| Iron Ore | 17.4 | 1.9 | 0.0 |
| Copper Ores | 52.4 | 21.9 | 0.0 |
| Copper Base Scrap | 86.1 | 32.6 | -0.2 |
| Manufactured Materials | |||
| Gypsum Products | 23.3 | 3.7 | -0.6 |
| Diesel Fuel | 33.0 | 21.0 | 3.9 |
| Asphalt Roofing | 8.4 | -0.4 | -1.6 |
| Paint | 9.0 | 0.7 | 0.0 |
| Plastic Construction Products | 19.2 | -1.1 | -0.1 |
| Vitreous Plumbing Fixtures | 2.2 | 0.0 | 0.0 |
| Ceramic Tile | 0.5 | -1.3 | 0.5 |
| Flat Glass | 2.4 | 0.0 | 0.3 |
| Fabricated Building Steel | 5.2 | 1.2 | 0.7 |
| Architectural Metalwork | 2.5 | 1.5 | 1.5 |
| Metal Plumbing Fixtures | 3.1 | 0.9 | -0.1 |
| Builders' Hardware | 4.5 | 1.7 | 1.7 |
| Sheet Metal Products | 4.8 | 2.2 | 1.9 |
| Steel Pipe and Tube | 4.9 | 4.0 | 2.4 |
| Nonferrous Pipe and Tube | 115.9 | 58.7 | 16.3 |
| Building Brick | 9.2 | 1.2 | 0.3 |
| Ready Mix Concrete | 13.0 | 2.0 | 0.3 |
| Concrete Block & Brick | 7.5 | 0.7 | 0.0 |
| Prestressed Concrete | 18.0 | 3.9 | 0.4 |
| Precast Concrete Products | 5.8 | -0.1 | -1.0 |
| Concrete Pipe | 5.2 | 0.0 | -0.1 |
| Wood Kitchen Cabinets | 2.3 | 0.6 | -0.1 |
| Millwork (window,door, cabinet) | 3.0 | 0.7 | 0.4 |
| Engineered Wood Products | 0.8 | -1.2 | -0.6 |
| Assembled Equipment | |||
| Hand and Edge tools | 5.2 | 1.0 | 0.1 |
| Power Hand Tools | -1.2 | -1.0 | 0.0 |
| Furnaces | 1.5 | 0.5 | 0.2 |
| Construction Machinery | 3.9 | 0.0 | 0.1 |
| Metal Doors, Sash and Trim | 3.1 | 1.7 | -0.6 |
| Summary | |||
| Construction Materials (commodities) | 7.7 | 1.9 | 0.3 |
| Inputs to Construction Industries (finished products) | 9.3 | 3.1 | 0.4 |
| Inputs to nonresidential Construction | 11.2 | 4.1 | 0.5 |
| Inputs to multi-family Construction | 8.7 | 2.5 | 0.3 |
| Source: Producer Price Index. Bureau of Labor Statistics | |||
| Source: US Department of Labor, Federal | |||
| Reserve Board, Census Bureau | |||
