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Construction Materials Prices Rise Only .1% in December

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Construction materials prices expanded just 0.1% in December and are up 1.3% year over year, according to a Jan. 15 Producer Price Index released by the Dept. of Labor. Nonresidential construction materials prices also rose only 0.1% for the month and are 1% higher than the same time one year ago.

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“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis,” said Associated Builders and Contractors Chief Economist Anirban Basu. “That said, there was some volatility in individual input segments, including natural gas prices, which were up 7.8%, and crude petroleum, which was up 7.1%,” he said.

“These increases are at least partially explained by seasonal factors and do not likely foreshadow aggressive price increases going forward. At the same time, certain input prices fell, including softwood lumber, down 3.3%, and nonferrous wire/cable, down 1.4%,” Basu added.

Overall, the nation’s wholesale goods prices expanded 0.4% in December and are up 1.2% year over year.

“While there is never a guarantee of input price stability, for now things seems reasonably calm,” Basu said. “The world economy is anticipated to accelerate this year to 3.6% growth, up from closer to 3% last year. That will help push the level of demand for construction materials higher, but not necessarily in ways that are especially damaging to a still-benign U.S. nonresidential construction industry outlook.”

The following materials prices increased in December:

• Fabricated structural metal product prices are up 0.1% and have risen 0.6% on a year-over-year basis.

• Natural gas prices rose 7.8% in December and are 4.9% higher than one year ago.

• Natural gas prices rose 7.8% in December and are 4.9% higher than one year ago.

• Crude energy prices grew 4.8% in December and are 4.4% higher year over year.

• Iron and steel prices expanded 1.6% in December but are down 5.9% from the same time last year.

• Prices for plumbing fixtures and fittings rose 0.1% for the month and are up 1.6% on a year-over-year basis.

• Steel mill products prices expanded 0.3% for the month but are 6.3% lower than one year ago.

A number of key construction inputs did not experience price increases for the month:

• Prices for prepared asphalt, tar roofing and siding declined 0.8% for the month but are up 3.6% from last year.

• Concrete products remained flat in December but are up 2.3% year over year.

• Nonferrous wire and cable prices shed 1.4% on a monthly basis and are down 3.4% from December 2012.

• Softwood lumber prices fell 3.3% for the month but are 6.6% higher than one year ago.

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