Construction price indexes rise steeply; manufacturing output, housing starts leap
The producer price index (PPI) for finished goods rose 0.3% in January, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported recently. The “core” index, which excludes food and energy costs, rose 0.4%. Over the past 12 months, the overall PPI rose 5.7% but the core was up only 1.5%. The only PPI that tracks completed construction, an index for new warehouse buildings, was up 1.5% for the month and 7.6% over 12 months.
The PPI for construction machinery and equipment climbed 1.2% and 5.2%. The PPI for construction materials and components rose 1.1% and 6.2%. Over the past 12 months, increases in PPIs for materials used by different construction segments have differed significantly: highways and streets, 14.6%; other heavy construction, 8.4%; multi-unit residential, 7.6%; nonresidential buildings, 7.3%; and single-unit residential, 7.0%. These differences are attributable to variations in price increases for key materials. For instance, the PPI for diesel fuel, which is most important in highway and other heavy construction, slipped 0.7% in January but jumped 39% over 12 months. Asphalt climbed 2.2% last month and 37% over 12 months. Concrete products went up 2.7% and 9.8%. Plastic construction products climbed 1.1% and 22.5%. Gypsum products were up 2.5% and 19.5%. Steel mill products (including products for other industries) fell 0.2% and 5.4%, but fabricated structural metal products were up 0.1% and 2.0%.