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Building Material Prices Jump In May

Big hikes in crude petroleum and crude energy products led to a 1.1 percent jump in May for key materials used by the construction industry. This happened even though prices for most other key materials held steady or even declined.

Even though costs for eight of the 11 key materials used by construction companies remained flat or declined, prices overall rose by more than one percent in May.

The Associated Builders and Contractors, citing data from the producer price index, said prices for construction industry materials as a whole expanded 1.1 percent for the month.

This is the largest month-to-month increase in more than two years, the ABC said, and it's also only the third time in the past 10 months that prices for construction "inputs" have grown on a monthly basis.

"Most notably, key energy prices rose meaningfully, with oil prices rising to roughly $50 per barrel," said Anirban Basu, chief economist for the ABC.

In May, crude petroleum prices jumped 15.6 percent; crude energy products prices went up 7.7 percent; and nonferrous wire and cable products expanded 0.9 percent.

But eight other products heavily used by the construction industry either remained flat or fell in price: fabricated structural metal product prices dropped 0.5 percent; natural gas prices fell 1.7 percent; plumbing fixtures remained flat; asphalt, tar roofing and siding fell 1.5 percent; iron and steel decreased 1 percent; steel mill products fell 2 percent; softwood lumber dropped 2.5 percent; and concrete products remained flat. More information can be found here.

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October 17, 2019, 6:36 am PDT

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