"Despite the increase in materials prices, this report does not signal a period of much higher inflation.” —ABC Chief Economist Anirban Basu.
Construction materials prices expanded 0.5 percent in March and are up 1.1 percent from March of last year, according to the U.S. Department of Labor’s April 11 producer price index release. Nonresidential construction materials prices are up 0.4 percent for the month and are 1 percent higher than the same time one year ago.
“Despite the increase in materials prices, this report does not signal a period of much higher inflation,” said Associated Builders and Contractors Chief Economist Anirban Basu. “While it is true that there were significant increases in overall monthly inflation for both the broader economy and for construction, only a handful of categories were actually associated with a meaningful uptick in prices."
Overall, the nation’s wholesale goods prices fell 0.1 percent in March but are up 1.7 percent year over year. Crude energy materials prices fell 6.8 percent in March but are still 13.6 percent higher than one year ago, and have expanded by 34.1 percent through the first three months of 2014.
“With respect to the broader economy, much of the inflation was related to food, which likely is a result of meteorological impacts,” said Basu. “With respect to construction, only three of 11 categories actually experienced increasing prices for the month. Given modest projections for both global and national economic growth, it is unlikely that significant inflationary pressures will be experienced during the month ahead with respect to most construction materials prices."
The following materials prices increased in March:
• Nonferrous wire and cable prices gained 0.1 percent in March but are down 2.7 percent from one year ago.
• Concrete products prices expanded 0.3 percent in March and are up 3.9 percent from one year ago.
• Prices for prepared asphalt, tar roofing, and siding expanded by 1.1 percent for the month and are up 0.1 percent from one year ago.
Eight of the 11 key construction inputs did not experience price increases for the month:
• Iron and steel prices fell 1.7 percent in March but are up 1.3 percent from the same time last year.• Natural gas prices fell 10.9 percent in March but are 48.5 percent higher than one year ago.
• Crude energy prices fell 6.8 percent in March but are 13.6 percent higher than one year ago.
• Steel mill products prices shed 1.1 percent for the month but are 1.4 percent higher than one year ago.
• Crude petroleum prices fell 6.4 percent in March but are up 3.9 percent from March 2013.
• Prices for plumbing fixtures shed 0.8 percent for the month but are up 1.9 percent from the same time last year.
• Fabricated structural metal product prices are down 0.2 percent for the month but have risen 0.5 percent from one year ago.
• Softwood lumber prices fell 0.8 percent in March and are 2.1 percent lower than one year ago.
To view the previous PPI report, click HERE.