"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." said Associated Builders and Contractors Chief
Economist Anirban Basu. Photo: Tosirog via Wikimedia Commons
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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.
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