The producer price index (PPI) for finished goods, rose 0.6% in August, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported today, noting that prices were collected before Hurricane Katrina struck. The increase was due to a 3.7% jump in energy costs. The “core” index, which omits food and energy, was unchanged for the month and up 2.4% over the past 12 months. BLS reported, “The index for materials and components for construction was unchanged in August, after falling 0.2% in July. Prices for asphalt felts and coatings jumped 8.5%, following no change in the preceding month. The indexes for building paper and board and for steel mill products declined less in August than they had a month earlier. Prices for gypsum products, nonferrous wire and cable, and paving mixtures and blocks rose more than they had in July. Alternatively, prices for concrete products advanced 0.6%, following a 1.9% increase in July. The plastic construction products index decreased at a faster rate in August compared with the prior month, while prices for millwork moved down after rising in July.” Many of these prices are likely to be higher by now, or soon.
The PPI for diesel fuel, which is not considered a construction material but is used to power offroad equipment and construction trucks and shows up in the fuel surcharge on freight deliveries, rose 3.1% in August and 49% over the past 12 months. Yesterday, the Energy Information Administration (www.eia.doe.gov) reported that the national average retail price for on-highway diesel fuel fell five cents to $2.85, which is still 25 cents higher than two weeks ago and 93 cents higher than a year ago. Highway vehicles, including construction trucks that travel on public roads, must normally use low-sulfur, undyed diesel fuel. However, to ease fuel shortages, the Internal Revenue Service and Environmental Protection Agency in the past two weeks have issued various limited-time waivers to allow use of dyed, high-sulfur fuel (normally allowed only for offroad equipment and heating oil) and jet fuel (from four airports). Several refineries and oil platforms have resumed production. But “the U.S. Coast Guard reports 52 platforms were sunk,” the Wall Street Journal reported Monday, and a couple of refineries may be out of action for months, implying continuing high prices for all petroleum products, including asphalt and feedstocks for construction plastics and roofing materials.