3/2014 by Bernard M. Markstein
Overview:
Prices for inputs used in nonresidential construction
accelerated their rise in January. Among items with large price increases were
cement, natural gas, iron and steel, copper, and architectural metalwork.
Diesel fuel, asphalt, nonferrous pipe and tube, and construction equipment
rental and leasing were items with large price decreases.
Prices of building materials primarily used in residential
construction also rose more rapidly in January. In addition to the price
movements already mentioned for nonresidential construction materials,
residential construction materials prices were subject to large price increases
in lumber (both softwood and hardwood), insulation materials, and gypsum.
Bad winter weather in January and February over much of the
nation hurt construction. Production and delivery of materials and products
were disrupted. As the weather improves, much of this lost activity will be
regained. For now, building materials prices will jump around as supply and
demand are affected by both bad and good weather.
The outlook for construction is positive with gradual
improvement forecast throughout 2014. Building materials prices should revert
to “normal” by late spring. For the second half of the year, building materials
prices will rise modestly and accelerate by late fall and into winter. Stronger
than forecast growth would result in a more rapid increase in building
materials prices. Lower than forecast growth would result in a less rapid rise
in building materials prices.
Downside risks to construction have fallen. Even though they
may carry a low probability, among the most likely risks are 1) a spike in
interest rates due to the Federal Reserve unwinding its asset purchase program
(known as Quantitative Easing) too quickly, 2) a debt default of a European
country, and 3) a European country exiting the euro. A fourth risk is
developments in the Ukraine and the West’s reaction. The possible impact on the
U.S. economy and construction is unclear at this juncture.
Special Note on this Month’s Data and Tables:
With the release of the January Producer Price Index (PPI)
data, the Bureau of Labor Statistics (BLS) “transitioned from the Stage of
Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation
system.” (See bls.gov/ppi/fdidtransition.htm for more details.)
As a result, the BLS introduced a number of new series,
including more series to cover construction prices. We have added a number of
these series to our regular tables. We have also taken the opportunity to
arrange the seasonally adjusted (SA) and not seasonally adjusted (NSA) in
separate tables. Since most of the reported PPI numbers are NSA numbers, the
new format will make comparing price movements easier and more relevant. In
this article, assume all numbers are NSA unless otherwise noted.
Feel free to let us know what you think of the new tables.
Also, if you would like us to cover a price index for an item not currently in
our tables, let us know and we will try to include it. Send requests to
b.markstein@reedbusiness.com.
Construction Materials Inflation:
The BLS reported that the January Producer Price Index for
materials and components used in construction rose 0.5% on a SA basis following
a 0.1% decline in December. The index was up 1.5% on a year-over-year NSA basis
and was 7.8% higher than in January 2011.
Prices for raw materials used in construction or to produce
products used in construction increased 0.6% (SA) in January after no change in
December. The index was up 3.0% from January 2013 and was up 7.4% from January
2011.
An index that measures inputs used in nonresidential
construction (excluding capital equipment) was up 0.5% in January after
increasing 0.1% in December. The index was 1.0% higher than in January 2013 and
was 6.9% higher than in January 2011.
An index that measures inputs used in residential
construction (excluding capital equipment) jumped 0.7% in January following a
0.1% advance in December. The index was 1.6% higher than in January 2013 and
was 8.4% higher than in January 2011.
|
US Construction-Related Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month NSA data |
3-Month Moving Average
from Previous Month NSA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Composite Indexes (Exclude capital equipment)
|
|
|
|
|||||||
|
Construction
Materials
(Unprocessed materials) |
1.3
|
-0.1
|
-0.5
|
0.2
|
-0.1
|
0.3
|
3.0
|
2.4
|
2.6
|
7.4
|
|
Materials
and Components for Construction
(Processed goods) |
0.6
|
0.0
|
0.0
|
0.2
|
0.0
|
0.0
|
1.5
|
1.5
|
1.7
|
7.8
|
|
|
|
|
|
|||||||
|
Inputs to
Construction
(Residential and Nonresidential) (Includes inputs to maintenance and repair) |
0.6
|
0.1
|
-0.5
|
0.1
|
-0.2
|
-0.3
|
1.2
|
1.3
|
1.1
|
7.4
|
|
Inputs to New Construction
|
0.6
|
0.1
|
-0.5
|
0.1
|
-0.2
|
-0.3
|
1.3
|
1.3
|
1.1
|
7.6
|
|
Inputs to Residential Construction
|
0.7
|
0.1
|
-0.3
|
0.2
|
-0.1
|
-0.2
|
1.6
|
1.6
|
1.5
|
8.4
|
|
Inputs to Nonresidential Construction
|
0.5
|
0.1
|
-0.6
|
0.0
|
-0.3
|
-0.4
|
1.0
|
1.0
|
0.7
|
6.9
|
|
Inputs to Commercial
Construction
|
0.5
|
0.0
|
-0.4
|
0.0
|
-0.1
|
-0.2
|
1.1
|
1.0
|
1.0
|
6.6
|
|
Inputs to Industrial
Construction
|
0.4
|
0.1
|
-0.4
|
0.0
|
-0.2
|
-0.3
|
0.9
|
0.8
|
0.6
|
6.3
|
|
Inputs to Heavy
Construction
|
0.5
|
0.1
|
-0.8
|
-0.1
|
-0.4
|
-0.5
|
0.8
|
0.9
|
0.5
|
6.9
|
|
|
|
|
|
|||||||
|
Inputs to Maintenance and Repair
|
0.6
|
0.1
|
-0.6
|
0.0
|
-0.4
|
-0.4
|
0.5
|
0.8
|
0.6
|
5.3
|
|
Inputs to Nonresidential Maintenance
and Repair |
0.6
|
0.1
|
-0.7
|
0.0
|
-0.4
|
-0.4
|
0.4
|
0.6
|
0.4
|
4.7
|
|
Inputs to Res Maintenance and Repair
|
0.7
|
0.1
|
-0.5
|
0.1
|
-0.3
|
-0.3
|
1.5
|
1.5
|
1.3
|
8.5
|
|
|
|
|
|
|||||||
|
(Indexes include installation and overhead)
|
|
|
|
|||||||
|
New
nonresidential building construction
|
0.7
|
0.0
|
0.1
|
0.2
|
0.4
|
0.5
|
3.3
|
3.1
|
3.1
|
8.9
|
|
New Warehouse Building Construction
|
0.3
|
0.0
|
1.0
|
0.4
|
0.1
|
0.1
|
2.3
|
2.9
|
2.9
|
9.6
|
|
New School Building Construction
|
1.0
|
0.1
|
0.1
|
0.4
|
0.6
|
0.6
|
3.9
|
3.4
|
3.3
|
9.9
|
|
New Office Construction
|
0.6
|
0.0
|
0.0
|
0.2
|
0.5
|
0.5
|
2.9
|
2.8
|
2.8
|
8.1
|
|
New Industrial Building Construction
|
0.5
|
0.1
|
0.1
|
0.2
|
0.6
|
0.6
|
4.0
|
4.1
|
4.0
|
9.2
|
|
New Health Care Building Construction
|
0.4
|
0.0
|
-0.2
|
0.1
|
0.2
|
0.4
|
2.9
|
3.1
|
3.0
|
NA
|
|
|
|
|
|
|||||||
|
Other Related Indexes
|
|
|
|
|||||||
|
PPI
Finished Goods
|
0.8
|
0.1
|
-0.5
|
0.1
|
-0.2
|
-0.3
|
1.5
|
1.2
|
0.7
|
7.2
|
|
PPI
Finished Goods less food and energy
|
0.7
|
0.1
|
0.0
|
0.3
|
0.3
|
0.2
|
1.7
|
1.4
|
1.3
|
6.8
|
|
CPI Urban
Consumer
|
0.4
|
0.0
|
-0.2
|
0.1
|
-0.2
|
-0.1
|
1.6
|
1.5
|
1.2
|
6.2
|
|
CPI Urban
Consumer less food and energy
|
0.2
|
-0.1
|
0.0
|
0.0
|
0.0
|
0.1
|
1.6
|
1.7
|
1.7
|
5.9
|
|
|
|
|
|
|||||||
|
Production
Index: Construction Supplies
|
-4.8
|
-3.7
|
-2.9
|
-3.8
|
-2.9
|
-1.8
|
1.5
|
3.5
|
5.1
|
12.6
|
|
Retail
Sales: Building & Equipment Supplies
|
-10.8
|
-6.1
|
-8.6
|
-8.4
|
-2.6
|
-2.9
|
3.3
|
5.1
|
0.7
|
25.6
|
|
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statistics; Production Index - Federal Reserve Board; Retail Sales - Census Bureau |
||||||||||
|
US Construction-Related SA Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month SA data |
3-Month Moving Average
from Previous Month SA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Composite Indexes (Exclude capital equipment)
|
|
|
|
|||||||
|
Construction
Materials
(Unprocessed materials) |
0.6
|
0.0
|
-0.3
|
0.1
|
0.1
|
0.5
|
3.0
|
2.4
|
2.6
|
7.4
|
|
Materials
and Components for Construction
(Processed goods) |
0.5
|
-0.1
|
0.1
|
0.2
|
0.1
|
0.1
|
1.5
|
1.5
|
1.7
|
7.8
|
|
|
|
|
|
|||||||
|
Other Related Indexes
|
|
|
|
|||||||
|
PPI
Finished Goods
|
0.6
|
0.4
|
-0.1
|
0.3
|
0.1
|
0.0
|
1.5
|
1.2
|
0.7
|
7.2
|
|
PPI
Finished Goods less food and energy
|
0.5
|
0.3
|
0.0
|
0.3
|
0.1
|
0.1
|
1.7
|
1.4
|
1.3
|
6.8
|
|
CPI Urban
Consumer
|
0.1
|
0.2
|
0.1
|
0.2
|
0.1
|
0.1
|
1.6
|
1.5
|
1.2
|
6.2
|
|
CPI Urban
Consumer less food and energy
|
0.1
|
0.1
|
0.2
|
0.1
|
0.1
|
0.1
|
1.6
|
1.7
|
1.7
|
5.9
|
|
|
|
|
|
|||||||
|
Production
Index: Construction Supplies
|
-1.0
|
-0.6
|
0.4
|
-0.4
|
0.2
|
0.8
|
1.5
|
3.5
|
5.1
|
12.6
|
|
Retail
Sales: Building & Equipment Supplies
|
1.4
|
0.0
|
0.9
|
0.7
|
-0.4
|
-0.4
|
3.3
|
5.1
|
0.7
|
25.6
|
|
SA = Seasonally Adjusted, NSA = Not seasonally adjusted,
NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statistics; Production Index - Federal Reserve Board; Retail Sales - Census Bureau |
||||||||||
Construction machinery prices increased 0.8% in January
following a 0.1% rise in December. Prices were 1.7% higher than in January 2013
and were 9.7% higher than in January 2011.
Construction machinery rental rates plunged 3.5% in January
after jumping 1.4% in December. Rental rates were 0.1% higher than in January
2013 and were 5.9% higher than in January 2011.
Excluding oil field equipment, rental rates plummeted 5.3%
in January after increasing 0.9% in December. Oilfield and well drilling
equipment rental and leasing rates remained unchanged for the twelfth
consecutive month. Rental rates excluding oil field equipment were 1.8% lower
than in January 2013 and were 7.3% higher than in January 2011.
|
US Construction-Related Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month NSA data |
3-Month Moving Average
from Previous Month NSA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Assembled Equipment
|
|
|
|
|||||||
|
Hand and
Edge tools
|
0.1
|
0.0
|
0.0
|
0.1
|
0.0
|
0.1
|
1.1
|
1.4
|
1.1
|
5.3
|
|
Power Hand
Tools
|
0.1
|
0.1
|
0.0
|
0.1
|
0.3
|
0.2
|
2.9
|
3.2
|
3.3
|
5.9
|
|
Appliances
|
0.0
|
0.2
|
0.1
|
0.1
|
0.0
|
-0.1
|
0.2
|
-0.9
|
-0.7
|
6.0
|
|
Furnaces
|
0.2
|
1.0
|
0.6
|
0.6
|
0.2
|
0.1
|
2.3
|
2.2
|
1.8
|
10.1
|
|
AC;
Refrigeration; and Forced Air Heating Equip. Mfg.
|
0.7
|
-0.1
|
1.0
|
0.5
|
0.3
|
0.3
|
3.0
|
2.0
|
2.8
|
8.3
|
|
Construction
Machinery
|
0.8
|
0.1
|
-0.2
|
0.2
|
0.0
|
0.0
|
1.7
|
1.3
|
1.5
|
9.7
|
|
Construction
Machinery Rental (incl. oilfield equip.)
|
-3.5
|
1.4
|
0.3
|
-0.6
|
0.4
|
0.3
|
0.1
|
3.4
|
1.5
|
5.9
|
|
Construction equipment rental and leasing
|
-5.3
|
0.9
|
0.0
|
-1.5
|
0.3
|
0.3
|
-1.8
|
2.9
|
1.4
|
7.3
|
|
Oilfield and well drilling equipment rental
and leasing |
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
1.7
|
1.7
|
6.1
|
|
Trucks over
14,000 Ibs. GVW
|
0.4
|
0.2
|
0.1
|
0.3
|
0.4
|
0.3
|
1.9
|
1.9
|
1.9
|
6.9
|
|
Metal
Doors, Sash and Trim
|
0.1
|
0.0
|
0.4
|
0.1
|
0.1
|
0.1
|
0.0
|
-0.1
|
-0.1
|
7.5
|
|
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statist |
||||||||||
Cement and Concrete:
Cement prices surged 2.0% in January after decreasing 0.1%
in December. Prices were up 3.5% from January 2013 and were up 9.1% from
January 2011.
Prestressed concrete products prices were unchanged in
January after climbing 0.5% in December. On a year-over-year basis, prices were
up 2.8% and were up 1.5% from January 2011.
Precast concrete products prices inched up 0.1% in January
following a 0.3% increase in December. Prices were up 1.7% from January 2013
and were up 6.5% from January 2011.
|
US Construction-Related Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month NSA data |
3-Month Moving Average
from Previous Month NSA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Construction Commodities
|
|
|
|
|||||||
|
Dimension
Stone
|
0.1
|
1.8
|
0.0
|
0.6
|
0.6
|
0.0
|
4.0
|
5.7
|
3.9
|
8.4
|
|
Cement
|
2.0
|
-0.1
|
-0.4
|
0.5
|
0.0
|
0.1
|
3.5
|
5.0
|
4.6
|
9.1
|
|
Construction
Sand, Gravel & Crushed Stone
|
1.3
|
-0.1
|
-0.6
|
0.2
|
-0.1
|
0.3
|
3.1
|
2.5
|
2.8
|
7.0
|
|
Softwood
Plywood
|
0.7
|
-2.0
|
-1.5
|
-0.9
|
-0.4
|
-0.3
|
-5.0
|
-1.5
|
2.0
|
18.5
|
|
Hardwood
Lumber
|
2.6
|
2.0
|
1.2
|
1.9
|
2.1
|
1.9
|
23.5
|
22.7
|
20.8
|
25.3
|
|
Softwood
Lumber
|
3.1
|
-1.3
|
2.6
|
1.4
|
1.0
|
1.8
|
2.8
|
6.6
|
12.8
|
24.8
|
|
Other Commodities
|
|
|
|
|||||||
|
Industrial
Natural Gas
|
3.1
|
0.6
|
4.8
|
2.8
|
2.0
|
1.8
|
3.1
|
1.4
|
3.1
|
-9.6
|
|
Plastic
Resins & Materials
|
1.0
|
-0.4
|
1.2
|
0.6
|
0.3
|
0.5
|
4.3
|
5.9
|
6.1
|
17.3
|
|
Insulation
Materials
|
1.5
|
0.0
|
-0.1
|
0.5
|
-0.1
|
0.4
|
8.2
|
7.9
|
8.2
|
21.0
|
|
Iron &
Steel Scrap
|
4.8
|
5.9
|
5.8
|
5.5
|
3.9
|
1.1
|
14.9
|
8.2
|
3.2
|
-7.1
|
|
Iron Ore
|
4.5
|
-0.1
|
0.0
|
1.5
|
0.3
|
0.6
|
9.3
|
-25.0
|
-25.0
|
-13.2
|
|
Copper Ores
|
5.1
|
-4.4
|
-0.1
|
0.1
|
-2.1
|
-0.7
|
-7.4
|
-11.7
|
-4.5
|
-21.5
|
|
Copper Base
Scrap
|
1.4
|
0.0
|
-0.8
|
0.2
|
-0.1
|
-0.1
|
-6.9
|
-6.2
|
-2.3
|
-7.3
|
|
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statistics |
||||||||||
Energy and Related Products:
The cold weather sent industrial natural gas prices 3.1%
(+2.5% on a SA basis) higher in January after increasing 0.6% in December.
Prices were up 3.1% from January 2013, but were down 9.6% from January 2011.
Petroleum refineries prices rose a modest 0.2% in January
after a 1.0% increase in December. Prices were down 1.7% from January 2013, but
were up 8.7% from January 2011.
Diesel fuel prices dropped 1.9% in January after jumping
2.9% in December. Prices were down 3.3% from January 2013, but were up 14.2%
from January 2011.
Plastic resins and materials prices climbed 1.0% in January
following a 0.4% decline in December. Prices were 4.3% higher than in January
2013 and were 17.3% higher than in January 2011.
Asphalt prices tumbled 2.2% in January following a 1.7%
surge in December. Prices were down 2.5% from January 2013, but were up 22.8%
from January 2011. Asphalt roofing prices slipped 0.3% in January after falling
0.8% in December. Prices were down 0.8% from January 2013 and were up 0.9% from
January 2011.
Plastics pipe prices shot up 2.5% in January after slipping
0.1% in December. Prices were down 0.8% from January 2013, but were up 13.8%
from January 2011. Plastics plumbing fixtures prices increased 0.4% in January
after a 0.1% decline in December. Prices were 1.7% higher than in January 2013
and were 4.9% higher than in January 2011.
|
US Construction-Related Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month NSA data |
3-Month Moving Average
from Previous Month NSA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Manufactured Materials
|
|
|
|
|||||||
|
Gypsum
Products
|
7.4
|
2.2
|
-1.6
|
2.7
|
-0.1
|
-0.7
|
11.6
|
16.1
|
13.7
|
44.5
|
|
Waferboard
and oriented strandboard (OSB)
|
0.6
|
-4.8
|
-1.0
|
-1.8
|
-0.7
|
-1.0
|
-31.4
|
-25.4
|
-16.8
|
27.0
|
|
|
|
|
|
|||||||
|
Petroleum
refineries
|
0.2
|
1.0
|
-3.7
|
-0.8
|
-2.1
|
-2.5
|
-1.7
|
-0.9
|
-4.2
|
8.7
|
|
Diesel Fuel
|
-1.9
|
2.9
|
-3.9
|
-1.0
|
-1.4
|
-1.4
|
-3.3
|
-0.9
|
-5.6
|
14.2
|
|
Asphalt
|
-2.2
|
1.7
|
-7.9
|
-2.9
|
-2.4
|
-2.9
|
-2.5
|
-3.3
|
-8.2
|
22.8
|
|
Asphalt
paving mixture & block mfg.
|
1.0
|
-0.3
|
-0.2
|
0.2
|
-0.2
|
-0.1
|
1.5
|
0.9
|
1.0
|
14.7
|
|
Asphalt
shingle and coating materials mfg.
|
-0.4
|
-0.5
|
-2.9
|
-1.3
|
-1.9
|
-1.3
|
-1.1
|
-0.8
|
-0.7
|
4.9
|
|
Asphalt
Roofing
|
-0.3
|
-0.8
|
-3.8
|
-1.7
|
-2.5
|
-1.8
|
-0.8
|
-0.6
|
-0.3
|
0.9
|
|
|
|
|
|
|||||||
|
Paint
|
-0.3
|
0.2
|
0.1
|
0.0
|
0.1
|
0.0
|
-1.5
|
-0.7
|
-1.0
|
14.0
|
|
Plastic
Construction Products
|
0.7
|
0.0
|
0.4
|
0.4
|
0.0
|
0.0
|
0.1
|
-0.6
|
-1.0
|
8.2
|
|
Plastics Pipe
|
2.5
|
-0.1
|
0.9
|
1.1
|
-0.4
|
-0.3
|
-0.8
|
-2.0
|
-2.3
|
13.8
|
|
Plumbing Fixtures
|
0.4
|
-0.1
|
-0.1
|
0.1
|
0.1
|
0.2
|
1.7
|
1.4
|
-1.1
|
4.9
|
|
Vitreous
Plumbing Fixtures
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
Pottery;
ceramics; and plumbing fixture mfg.
|
1.1
|
-1.5
|
1.4
|
0.3
|
-0.2
|
0.1
|
1.7
|
0.9
|
2.4
|
9.3
|
|
Ceramic
Tile
|
0.0
|
-1.5
|
0.8
|
-0.3
|
-0.3
|
0.0
|
5.4
|
4.9
|
5.0
|
1.7
|
|
Flat Glass
|
-0.6
|
-0.4
|
1.3
|
0.1
|
0.0
|
0.1
|
1.5
|
2.3
|
2.2
|
5.2
|
|
|
|
|
|
|||||||
|
Steel Mill
Products
|
1.2
|
0.3
|
0.8
|
0.8
|
0.6
|
0.4
|
0.5
|
-1.0
|
-0.6
|
0.3
|
|
Steel Pipe and Tube
|
0.6
|
-0.2
|
0.1
|
0.2
|
-0.2
|
0.1
|
-1.8
|
-5.1
|
-4.2
|
-0.2
|
|
Hot rolled bars, plates & structural shapes
|
3.3
|
0.2
|
0.5
|
1.3
|
1.1
|
0.5
|
1.3
|
-1.6
|
-0.5
|
0.1
|
|
Extruded
Aluminum rod, bar and other shapes
|
0.5
|
-0.3
|
1.1
|
0.4
|
-0.4
|
-0.2
|
-6.3
|
-3.9
|
-4.0
|
-6.9
|
|
Architectural
Metalwork
|
3.4
|
-2.4
|
0.0
|
0.3
|
-0.7
|
0.0
|
1.1
|
-1.8
|
0.5
|
5.8
|
|
Metal
Plumbing Fixtures
|
0.2
|
0.0
|
0.0
|
0.1
|
0.0
|
0.0
|
1.6
|
1.6
|
1.6
|
5.9
|
|
Builders’
Hardware
|
0.9
|
-0.7
|
0.8
|
0.3
|
0.0
|
0.3
|
2.1
|
0.9
|
1.4
|
7.0
|
|
Sheet Metal
Products
|
-0.5
|
0.1
|
-1.2
|
-0.5
|
0.0
|
-0.3
|
-1.8
|
-1.8
|
-2.0
|
-0.5
|
|
|
|
|
|
|||||||
|
Copper and
Copper Products
|
2.5
|
-1.2
|
-0.6
|
0.3
|
-0.7
|
-0.4
|
-6.5
|
-8.2
|
-4.8
|
-17.0
|
|
Copper and
Brass Mill Shapes
|
1.2
|
1.0
|
-1.1
|
0.4
|
0.0
|
-0.2
|
-5.0
|
-6.1
|
-6.0
|
-15.3
|
|
Nonferrous Pipe and Tube
|
-1.5
|
3.0
|
-1.0
|
0.2
|
0.7
|
0.2
|
-6.4
|
-4.7
|
-7.5
|
-19.4
|
|
|
|
|
|
|||||||
|
Building
Brick
|
-0.2
|
0.1
|
0.5
|
0.1
|
0.3
|
0.3
|
2.2
|
1.2
|
1.2
|
-1.6
|
|
Ready Mix
Concrete
|
1.2
|
0.0
|
0.2
|
0.4
|
0.1
|
0.1
|
3.1
|
2.5
|
2.9
|
6.8
|
|
Concrete
Block & Brick
|
0.7
|
0.2
|
0.2
|
0.4
|
0.1
|
0.0
|
2.8
|
2.2
|
2.2
|
5.3
|
|
Prestressed
Concrete
|
0.0
|
0.5
|
0.9
|
0.5
|
-0.1
|
0.0
|
2.8
|
2.7
|
4.3
|
1.5
|
|
Precast
Concrete Products
|
0.1
|
0.3
|
0.1
|
0.2
|
0.1
|
0.1
|
1.7
|
1.7
|
2.0
|
6.5
|
|
Concrete
Pipe
|
0.7
|
0.6
|
-0.2
|
0.4
|
0.4
|
0.2
|
3.3
|
3.1
|
2.6
|
9.6
|
|
|
|
|
|
|||||||
|
Engineered
Wood Products
|
0.4
|
0.1
|
-0.3
|
0.1
|
0.2
|
0.3
|
5.2
|
7.8
|
8.1
|
21.5
|
|
Wood
Kitchen Cabinet and Countertop Mfg.
|
1.2
|
0.2
|
0.0
|
0.5
|
0.0
|
0.0
|
2.8
|
2.3
|
2.3
|
8.1
|
|
Millwork
(window, door, cabinet)
|
0.9
|
0.2
|
0.2
|
0.4
|
0.1
|
0.1
|
2.9
|
2.7
|
2.6
|
8.2
|
|
Wood Window
and Door Mfg.
|
1.2
|
-0.1
|
0.5
|
0.5
|
0.2
|
0.2
|
3.3
|
2.6
|
2.8
|
9.7
|
|
Metal
Window and Door Mfg.
|
0.0
|
0.0
|
0.7
|
0.2
|
0.2
|
0.2
|
0.0
|
0.0
|
0.0
|
7.4
|
|
Laminated
Plastics
|
0.7
|
-0.1
|
-0.1
|
0.2
|
0.0
|
0.0
|
4.2
|
3.7
|
3.7
|
9.3
|
|
Nonresidential
Electric Lighting Fixture Mfg.
|
0.1
|
0.1
|
0.0
|
0.1
|
0.0
|
0.0
|
-0.1
|
-0.3
|
0.1
|
5.2
|
|
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statistics |
||||||||||
|
US Construction-Related SA Price Indexes
|
||||||||||
|
|
Percent Change
|
|||||||||
|
|
Monthly
from Previous Month SA data |
3-Month Moving Average
from Previous Month SA data |
Year-over-year
NSA data |
3 Years Ago
NSA data |
||||||
|
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
Dec-13
|
Nov-13
|
Jan-14
|
|
Construction Commodities
|
|
|
|
|||||||
|
Construction
Sand, Gravel & Crushed Stone
|
0.7
|
0.0
|
-0.3
|
0.1
|
0.1
|
0.5
|
3.1
|
2.5
|
2.8
|
7.0
|
|
Softwood
Lumber
|
-0.6
|
-1.6
|
2.9
|
0.2
|
1.4
|
2.7
|
2.8
|
6.6
|
12.8
|
24.8
|
|
Other Commodities
|
|
|
|
|||||||
|
Industrial
Natural Gas
|
2.5
|
-0.6
|
0.7
|
0.9
|
0.2
|
0.9
|
3.1
|
1.4
|
3.1
|
-9.6
|
|
Copper Base
Scrap
|
0.1
|
-2.2
|
0.6
|
-0.5
|
-0.5
|
0.4
|
-6.9
|
-6.2
|
-2.3
|
-7.3
|
|
Manufactured Materials
|
|
|
|
|||||||
|
Diesel Fuel
|
-1.8
|
6.2
|
-3.1
|
0.3
|
0.8
|
-0.3
|
-3.3
|
-0.9
|
-5.6
|
14.2
|
|
Metal
Plumbing Fixtures
|
0.0
|
0.1
|
0.2
|
0.1
|
0.1
|
0.1
|
1.6
|
1.6
|
1.6
|
5.9
|
|
Ready Mix
Concrete
|
0.8
|
-0.1
|
-0.3
|
0.1
|
0.0
|
0.1
|
3.1
|
2.5
|
2.9
|
6.8
|
|
Millwork
(window, door, cabinet)
|
0.8
|
0.1
|
0.2
|
0.4
|
0.2
|
0.2
|
2.9
|
2.7
|
2.6
|
8.2
|
|
Assembled Equipment
|
|
|
|
|||||||
|
Construction
Machinery
|
0.5
|
0.0
|
-0.3
|
0.1
|
0.0
|
0.0
|
1.7
|
1.3
|
1.5
|
9.7
|
|
|
|
|
|
|||||||
|
Summary
|
|
|
|
|||||||
|
Composite Indexes (Exclude capital equipment)
|
|
|
|
|||||||
|
Construction
Materials
(Unprocessed materials) |
0.6
|
0.0
|
-0.3
|
0.1
|
0.1
|
0.5
|
3.0
|
2.4
|
2.6
|
7.4
|
|
Materials
and Components for Construction
(Processed goods) |
0.5
|
-0.1
|
0.1
|
0.2
|
0.1
|
0.1
|
1.5
|
1.5
|
1.7
|
7.8
|
|
|
|
|
|
|||||||
|
Other Related Indexes
|
|
|
|
|||||||
|
PPI
Finished Goods
|
0.6
|
0.4
|
-0.1
|
0.3
|
0.1
|
0.0
|
1.5
|
1.2
|
0.7
|
7.2
|
|
PPI
Finished Goods less food and energy
|
0.5
|
0.3
|
0.0
|
0.3
|
0.1
|
0.1
|
1.7
|
1.4
|
1.3
|
6.8
|
|
CPI Urban
Consumer
|
0.1
|
0.2
|
0.1
|
0.2
|
0.1
|
0.1
|
1.6
|
1.5
|
1.2
|
6.2
|
|
CPI Urban
Consumer less food and energy
|
0.1
|
0.1
|
0.2
|
0.1
|
0.1
|
0.1
|
1.6
|
1.7
|
1.7
|
5.9
|
|
|
|
|
|
|||||||
|
Production
Index: Construction Supplies
|
-1.0
|
-0.6
|
0.4
|
-0.4
|
0.2
|
0.8
|
1.5
|
3.5
|
5.1
|
12.6
|
|
Retail
Sales: Building & Equipment Supplies
|
1.4
|
0.0
|
0.9
|
0.7
|
-0.4
|
-0.4
|
3.3
|
5.1
|
0.7
|
25.6
|
|
SA = Seasonally Adjusted, NSA = Not seasonally adjusted,
NA = Not Available
Source: Producer Price Index (PPI) - Bureau of Labor Statistics; Production Index - Federal Reserve Board; Retail Sales - Census Bureau |
||||||||||
Copper and Copper Products:
Copper ores prices continue on their recent wild ride,
rocketing up 5.1% in January following a 4.4% nosedive in December. Prices were
7.4% lower than in January 2013 and were 21.5% lower than in January 2011.
Developments in China’s economy seem to be having a large impact on world copper
prices.
Copper base scrap prices increased 1.4% in January after no
change in December. Prices were down 6.9% from January 2013 and were down 7.3%
from January 2011.
Prices for copper and copper products ended four months of
decline, surging 2.5% in January. Prices were down 6.5% from January 2013 and
were down 17.0% from January 2011.
Copper and brass mill shapes prices rose strongly for the
second month in a row, up 1.2% in January after increasing 1.0% in December.
Prices were down 5.0% from January 2013 and were down 15.3% from January 2011.
Other Metals:
Steel mill products prices jumped 1.2% in January after
rising 0.3% in December. Prices were 0.5% higher than in January 2013 and were
0.3% higher than in January 2011. Hot rolled bars, plates, and structural
shapes prices shot up 3.3% in January following a 0.2% increase in December.
Prices were 1.3% higher than in January 2013 and were only 0.1% higher than in
January 2011.
Iron and steel scrap prices—often a good indicator of the
likely near-term movement of steel prices, marked its third consecutive month
of sharp price increases. Prices were up 4.8% in January after a 5.9% increase
in December. Prices were 14.9% higher than in January 2013, but were 7.1% lower
than in January 2011.
Extruded aluminum rod, bar, and other shapes prices
rebounded 0.5% in January following a decline of 0.3% in December. Prices were
down 6.3% from January 2013 and were down 6.9% from January 2011.
Architectural metalwork prices more than made up for their
fall of 2.4% in December, surging 3.4% in January. Prices were up 1.1% from
January 2013 and were up 5.8% from January 2011.
Softwood Lumber and Gypsum:
Single-family housing construction activity largely drives
demand for softwood lumber and gypsum products. As the single-family housing
market has improved, demand for these materials has increased.
Softwood lumber price movements are complicated by
fluctuations in Canadian softwood lumber exports to the U.S., which are
regulated by the Softwood Lumber Agreement (SLA). Each month, the level of
exports permitted and relevant export fees are determined by a schedule based
on average weekly Random Lengths (RL) Framing Lumber Composite prices for a
specified period. The schedule determining the permitted level of exports and
export fees consists of four tiers. The four tiers, from most to least
restrictive and the related average prices per thousand board feet determining
which tier is in force for the month, are as follows:
- Tier 1: average price of $315 or lower
- Tier 2: average price of $316 to $335
- Tier 3: average price of $336 to $355
- Tier 4: average price of $356 or higher; eliminates all restrictions and export fees on Canadian softwood lumber exports to the United States
For November 2013 through March 2014, tier 4—no
restrictions—has been in force. Reed Economics estimates that the average price
for April will be $388, again resulting in tier 4 and no restrictions.
The table below summarizes recent average prices and the
resulting tier.
|
Average Prices Used to Determine SLA
Canadian Softwood Export Restrictions
|
||||||||||||
|
|
2013
|
|||||||||||
|
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
|
Average
Price
|
$357
|
$385
|
$395
|
$416
|
$443
|
$407
|
$356
|
$326
|
$353
|
$353
|
$380
|
$387
|
|
Tier
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
2
|
3
|
3
|
4
|
4
|
|
|
2014
|
|||||||||||
|
|
Jan
|
Feb
|
Mar
|
Apr*
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
|
Average
Price
|
$396
|
$389
|
$401
|
$388
|
|
|
|
|
|
|
|
|
|
Tier
|
4
|
4
|
4
|
4
|
|
|
|
|
|
|
|
|
|
Source: Foreign Affairs and International
Trade Canada
*Reed Construction Data estimate |
||||||||||||
The PPI for softwood lumber climbed 3.1% in January
following a 1.3% drop in December. Prices were up 2.8% from January 2013 and
were up 24.8% from January 2011.
Last year, several gypsum producers announced price
increases of 20% effective at the beginning of this year. Their efforts are
already bearing some fruit. Gypsum prices catapulted 7.4% higher in January
after increasing 2.2% in December. Prices were up 11.6% from January 2013 and
were up 44.5% from January 2011.
Outlook for Construction Materials Prices:
As some signs of spring emerge, the U.S. economy is poised
for moderate growth. As the weather improves, residential construction will
return to an upward trajectory. There will be efforts to make up for delays on
both residential and nonresidential construction projects.
The probability of most of the risks to improved growth
occurring have declined in recent months. The major unknown at this point is
the outcome of the current situation in the Ukraine and its impact on the U.S.
economy and construction activity.
The Reed forecast assumes that nonresidential construction
activity rebounds strongly with better weather and then proceeds with moderate
growth in the second half of 2014 and in 2015. The impact on construction
materials prices is a possible bump upwards with better weather as construction
activity rebounds. Following that adjustment, there should be moderate upward
pressure on prices in the subsequent months with greater increases in prices
towards the latter part of this year and into 2015.
Source: Reed
Construction Data
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