US contractors see moderate materials price rises

Prices for construction materials and other industry inputs in the US were up +2.0% for the year to October, the same as consumer price inflation. However, construction input prices fell -0.4% in comparison with September, based on data gathered by the Associated General Contractors of America (AGC).

Compared to a year ago, the biggest rise in producer price index (PPI) inputs for construction was in diesel fuel, which rose +12.6% compared to October 2011. There was also a +2.3% rise in the price of concrete products, a +2.7% increase for plastic construction products and a +3.6% gain in the cost of construction machinery and other equipment. There have also been increases for gypsum products, insulation, timber and architectural coatings.

However, the cost of some metallic construction products has fallen, including structural steel, pipes and tubes, sheet metal products and aluminium mill products. The price of bricks and tiles is also lower than a year ago.

Commenting on the figures, the AGC’s chief economist, Ken Simonson said, “Although several materials retreated in price last month, prices in the past year have still outpaced the tiny increases in contractors bids. In addition, some of the price drops have already reversed, or will soon, leaving contractors who have already submitted bids vulnerable to losses.”