The producer price index (PPI) for finished goods was unchanged for the month of June, seasonally adjusted, and up 3.6% over the past 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. The “core” index, which omits food and energy prices, rose just 2.2% over the year. BLS commented, “Subsequent to a 0.2% decline in May, prices for materials and components for construction climbed 0.3% in June [and 5.1% over 12 months]. Accounting for more than half of this upturn, the index for softwood lumber increased 3.9%, after falling 5.7% in the previous month. Prices for plywood, building paper and board, nonferrous wire and cable, and wiring devices also rose in June, following decreases in the prior month. The treated wood index went up more than it did in May. By contrast, prices for plastic construction products declined 0.7% in June, after increasing 0.6% in the preceding month. The indexes for paving mixtures and blocks, concrete products, and hardwood lumber also turned down in June, while prices for steel mill products fell more than they did in May.” The largest price increases in construction inputs over the past 12 months have been for diesel fuel, 64%; copper and brass mill shapes, 15%; gypsum products, 13%; and cement, 12%.
Cement shortages continue to be a concern. The U.S. Geological Survey reported on Friday that imports increased 28% in January-April 2005 compared to the same months of 2004, while U.S. production slipped 1%. Consumption rose 5%. In the 10 days, Governors Perry (Texas) and Bush (Florida) have written to Commerce Secretary Gutierrez, seeking his help in getting the Southern Tier Cement Committee (STCC) to agree to allow more Mexican cement into the U.S. without anti-dumping duties. AGC CEO Stephen Sandherr followed up on an earlier letter to Gutierrez by writing directly to the STCC. U.S. reliance on imports is increasing. The Portland Cement Assn. and AGC have separately received reports of shortages in part or all of 28 states plus the District of Columbia, up from 23 states in May.