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Monthly Costs For Building Products Up Slightly

A report on key construction materials prices for the month of June contained a mixed bag of information. The month-to-month result shows a percentage increase, albeit a slight one. But on a year-to-year basis, costs have actually declined for seven straight months.

Year-to-year prices for key construction industry materials declined for the seventh straight month in June, the Associated Builders and Contractors said.

But the monthly trend is a just the opposite. Prices increased slightly, by a mere 0.2 percent in June. This came on the heels of a 1.1 percent jump in May, compared to April.

"The last time the construction industry saw annual declines of seven months or greater was the third and fourth quarters of 2009," said Anirban Basu, chief economist for the Associated Builders and Contractors. This happened when the global economy was in the throes of a financial crisis.

"However, June's year-to-year decline in construction input prices was the smallest of 2015," Basu noted. He also threw in this cautionary note: "At some point, input prices will begin to rise, perhaps aggressively, but that time has not yet arrived."

Of the 11 key materials heavily used by construction firms, only five increased in price in June:
o Crude energy materials were up 2.2 percent for the month, but 36 percent lower year-to-year.
o Fabricated structural metal increased 0.5 percent in June, and is up 0.6 percent on an annual basis.
o Natural gas jumped 12.9 percent month-to-month, but is down 39.6 percent for the year.
o Iron and steel went up 0.8 percent in June, but have decreased 13.9 percent annually.
o Softwood lumber increased 3.6 percent for the month, and is also 6.2 percent lower for the year.
The remaining six key construction inputs either remained flat or decreased in price for the month:
o Plumbing fixtures were flat, and are up 1.2 percent annually.
o Prepared asphalt, tar roofing and siding have declined 1.4 percent, and are down 1.2 percent for the year.
o Steel mill products dropped 1 percent, and are 12.2 percent lower on an annual basis.
o Concrete products were down 0.1 percent, but are up 4.2 percent year-to-year.
o Crude petroleum decreased 1.4 percent, and is also down 44 percent from a year ago.
o Nonferrous wire and cable dropped 0.8 percent, and have decreased 3.1 percent annually.

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October 17, 2019, 9:28 am PDT

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