April nonres starts to improve.

The producer price index (PPI) for finished goods increased 0.7% in April before seasonal adjustment (0.2% seasonally adjusted) and 6.5% over 12 months, the Bureau of Labor Statistics (BLS) reported on Tuesday. The PPI for inputs to construction industries, which includes materials used in all types of projects, plus items such as diesel fuel that are consumed during construction, climbed 1.2% for the month and 6.5% over 12 months.

In contrast, the consumer price index (CPI), which many public agencies use for estimating cost escalation, rose 3.9%. The 35% cumulative change in construction PPIs since December 2003, when steel prices first spiked, is more than double the 17% change in the CPI.

The size of recent increases has grown: the PPI for steel mill products climbed 5.5% for the second straight month and 10.2% over 12 months. PPIs rose for aluminum mill shapes (3.2% for the month, 2.4% over 12 months), asphalt paving mixtures and blocks (1.7%, 5.1%), concrete products (1.3%, 3.4%) and diesel fuel (2.7%, 53%). Increases by segment were highest for highway and street construction (1.9%, 12%) and other heavy construction (2.1%, 10%), followed by nonresidential buildings (1.2%, 6.8%), multi-unit residential (1.1%, 4.8%) and single-unit residential (0.6%, 3.4%).

Further large increases in steel, plastics, diesel, and asphalt prices have occurred or been announced since the PPI data were collected in mid-April. Online newsletter SteelOrbis.com reported today, “The $40 [per ton] June price increase announced by US rebar mills has been absorbed into the domestic market, with customers happily gobbling up whatever tons they can find, particularly in areas with very tight supplies like the Midwest….even after the domestic price increase for June, these prices are still lower than the numbers at which distributors and traders are selling their import inventories. With very little imports arriving this summer because of the high price expectations from foreign mills, and scrap prices expected to rise again in June due to the high international demand, it is very likely that we will see another significant domestic price hike for July.”

A Texas supplier of construction steel products reported today, “PC strand prices for June delivery are now up more than 70% since the beginning of the year and fabricated rebar is up 33%.”

Wire rod and structural steel producers and importers have announced multiple increases this month. A southwestern Illinois electrical contractor reported on May 15, “My suppliers have informed me that PVC [polyvinyl chloride] products will increase 20-30% next week and [a steel products supplier] will have a 35% increase in their steel products June 1.”

A May 20 press release from Stevens Roofing Systems, based in Holyoke, Mass., announced “base price increases of 5-8% on all TPO, Hypalon, PVC products and certain accessories lines. The increases will be effective for all orders with shipments scheduled on or after June 15. According to President Peter Kesser, ‘The escalating pricing of [petrochemical] raw materials combined with rapid increases in the cost of steel products and the transportation of all raw materials make it necessary for us to implement this price increase. A second increase will follow on August 1…of approximately the same magnitude, assuming the market continues its current level of volatility….Due to the market volatility, we highly recommend to our customers that all bids include escalation clauses to provide protection from further potential increases, which may become necessary before the end of the year.’”

A concrete products supplier informed customers in the Mid-Atlantic region on May 1, “Effective May 15 we will be adding a fuel surcharge to all concrete tickets of $9 per load.” In Missouri, an insulation supplier notified customers on May 15, “Effective June 2, we will charge $15 per stop for any deliveries made by our trucks,” and a materials supplier wrote it would implement a $12-per-delivery surcharge on July 1.

The value of new construction starts in April climbed 9%, seasonally adjusted, McGraw-Hill Construction reported today. “Much of the increase came as the result of a strong performance by nonbuilding construction, which is comprised of public works and electric utilities. Nonresidential building showed moderate improvement in April, while residential building stayed unchanged from its March pace.

For the first four months of 2008, total construction on an unadjusted basis [was] down 17% from the same period a year ago. Excluding residential building, new construction starts in the first four months of 2008 rose 3%.”

The American Institute of Architects reported on Wednesday that its monthly Architecture Billings Index rose in April but remained below a breakeven level of 50. Among firms with a predominantly institutional practice, slightly more reported an increase than a decrease in billings. But readings for firms with mixed, commercial/industrial or multi-family residential practices were all at or near the low points of the 12-year-old survey.

Seasonally adjusted nonfarm payroll employment by state rose in 10 states and the District of Columbia in April, fell in 39 states and was unchanged in Missouri, BLS reported on Friday. Over the year, employment increased in 41 states and DC and decreased in nine states. The largest over-the-year percentage gains in employment were reported in Wyoming, 3.1%; Texas, 2.5%; Utah, 2.1%; and New Hampshire, 2.0%. The largest over-the-year percentage declines in employment occurred in Rhode Island, -1.8%; Michigan, -1.7%; Florida, -0.8%; and Wisconsin, -0.6%.

Construction employment increased in only five states in April, fell in 37 and was within 100 jobs of March levels in eight plus DC. Compared to April 2007, construction employment rose in 18 states plus DC, fell in 31 and was level in Washington. The biggest year-over-year percentage gains were in Louisiana, North and South Dakota, Oklahoma and Texas, all 4%. The largest percentage drops were in Florida, -14%; Arizona, -11%; California, -9%; Michigan and Nevada, both -8%.