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This article focuses on the latest U.S. building material cost increases as laid out in the Producer Price Index (PPI) data set compiled and published by the Bureau of Labor Statistics (BLS).
The PPI series measures prices for goods ‘as they leave the factory gate’. They’re not necessarily as up-to-the-minute relevant as some other measures. For example, there have been sighs of relief in the marketplace because of recent perceived price softening in the forestry sector. The moderation relates to transactions on commodity exchanges covering ‘spot’ and ‘futures’ prices.
Therefore, some easing may be imminent, and again especially relating to lumber and its byproducts, but there are still numerous cost hikes among other construction material inputs to raise an eyebrow or two.
Prices for steel, aluminum and copper products, along with gasoline and diesel fuel, have all been climbing significantly higher, to some extent under the cover of the more attention-grabbing advances in forestry products.
In any event, Graph 1 shows the dilemma faced by contractors. In hopes of being awarded work, they’ve been keeping their bid prices low, while their expenses have been increasing alarmingly.
Appearing below are 30 graphs and a detailed table. 28 of the graphs are in clusters of four each. The graphs and table feature latest monthly updates of what has appeared before at ConstructConnect’s website.
Recently, many of the slopes in the cluster graphs have taken on a steepness rarely, if ever, seen before.
Please click on the following link to download the PDF version of this article: Economy at a Glance Vol. 17, Issues 110 and 111 – PPI Measures of Construction Material Costs are Still Shouting Warnings – PDF
Alex Carrick is Chief Economist for ConstructConnect. He has delivered presentations throughout North America on the U.S., Canadian and world construction outlooks. Mr. Carrick has been with the company since 1985. Links to his numerous articles are featured on Twitter @ConstructConnx, which has 50,000 followers.
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