Home » Construction costs cool but still outstrip overall CPI, PPI; housing, hotels stay hot May 20, 2005
Inflation reports this week showed mixed messages for both consumer and producer prices, including construction materials. On Wednesday, the Bureau of Labor Statistics (BLS) reported that the consumer price index for all urban consumers (CPI-U) rose 0.5% in April, seasonally adjusted, and 3.5% for the 12 months since April 2004. Yet the “core” index, which omits energy and food costs, was unchanged for the month and rose only 2.2% over the 12-month span. The CPI for urban wage earners and clerical workers (CPI-W), which is used to adjust many labor contracts in construction and other industries, rose 3.7% since April 2004.
The producer price index (PPI) for finished goods moved up 0.6% in April, seasonally adjusted, and 4.8% over 12 months, BLS reported on Tuesday. The PPI for materials and components for construction fell 0.1% for the month and slowed to a 6.4% rise over the past 12 months. Earlier in the year, the 12-month increase for construction materials had been more than 10%. BLS noted, “Prices for building paper and board dropped 6.8% in April, after rising 2.9% a month earlier. The indexes for fabricated structural metal products, asphalt felts and coatings, softwood lumber, and millwork also moved down, following advances in March. Prices for plastic construction products, concrete products, and nonferrous wire and cable climbed at slower rates than they did in the prior month. Conversely, the steel mill products index declined 1.8% in April, compared with a 3.2% decrease in March. Prices for metal valves (except fluid power), paving mixtures and blocks, and cement moved up, after falling in the preceding month.” The PPI for construction machinery and equipment rose 0.1% for the month and 6% over 12 months. The index for crude materials for construction, an indicator of possible future materials cost increases, rose 0.9% in April and 6.1% over 12 months. One steel supplier reported to AGC that it had been notified of a $10-per-ton increase for May 1, followed on May 10 by an announcement of a $30-per-ton decrease, effective immediately.
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