PPI metrics for building materials costs are still warning


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This article focuses on the most recent increases in the cost of building materials in the United States as provided by the Producer Price Index data set compiled and published by the Bureau of Labor Statistics. The PPI series measures the prices of goods as they leave the factory gate. It is not necessarily as modern as some other procedures. For example, there have been sighs of relief in the market due to the recent price drop seen in the forestry sector. Moderation relates to transactions on commodity exchanges covering “spot” and “futures” prices. Therefore, some mitigation may be imminent, again specifically relating to sawn timber and its by-products, but there are still many cost increases among other building material inputs to raise an eyebrow or two. Prices of steel, aluminum and copper products, along with gasoline and diesel fuel, have risen significantly, somewhat under the guise of more striking progress in forest products. In any case, Table 1 illustrates the dilemma faced by contractors. Hoping to get work, they’ve kept their offer prices low, while their expenses have been increasing alarmingly. Below are 30 detailed graphs and tables. 28 graphs in groups of four each. The charts and table feature the latest monthly updates of what’s before on the ConstructConnect website. Recently, many of the slopes in the steeper cluster graphs have been seldom seen before. Graph 1: US construction quotation prices versus material input costs Data source: Producer Price Index Series (BLS) Graph: ConstructConnect. Graph 2: US Building Materials Cost Changes from the PPI Series – June 2021 Data source: Bureau of Labor Statistics (BLS) Charts: ConstructConnect. Chart set 1 – Forest Products: US Building Materials Costs (1) – Producer Price Index (PPI) Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) PPI) series, not seasonally adjusted (NSA). Diagrams: ConstructConnect. Chart Group 2 – Steel Products: US Building Materials Costs (2) – Producer Price Index (PPI) Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) Series, not seasonally adjusted (NSA). Diagrams: ConstructConnect. Chart set 3 – Cement: US building materials costs (3) – Producer Price Index (PPI) series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) series , not seasonally adjusted (NSA). Diagrams: ConstructConnect. Chart set 4 – Basic Materials: US Building Materials Costs (4) – From the Producer Price Index (PPI) Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) PPI) series, not seasonally adjusted (NSA). Diagrams: ConstructConnect. Chart set 5 – Energy Products: US Building Materials Costs (5) – Producer Price Index (PPI) Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) PPI) series, not seasonally adjusted (NSA). Diagrams: ConstructConnect. Chart set 6 – Accessories and Artery: US Building Materials Costs (6) – From the Producer Price Index (PPI) Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) PPI), non-seasonally adjusted (NSA) graphs: ConstructConnect. Chart Set 7 – Equipment: US Building Materials Costs (7) – PPI Series Last data points are for June 2021. Data source: US Bureau of Labor Statistics (BLS), PPI Series , not seasonally adjusted (NSA). Diagrams: ConstructConnect. Table 1: US Producer Price Index (PPI) Results Percentage change in April 2021 index from: 3 years 1 year 6 months 3 months ago 1 month ago Final demand/service/goods/energy/inputs: final demand build 11.6% 3.5% 3.3% 2.4% 0.7% New warehouse building building 11.0% 4.0% 3.8% 3.6% 0.7% New school building construction 10.9% 1.5% 1.6% 1.1% 0.1% New administrative building construction 12.6% 5.1% 4.6% 1.9% 0.5% New industrial construction 12.0% 2.1% 1.4% 1.1% 0.3% Construction of new healthcare buildings 11.9% 4.0% 4.4% 4.1% 0.9% Architectural and engineering services 5.6% 3.2% 1.5% 0.6% 0.1% Construction machinery and equipment 11.2% 3.2% 3.1% 1.8% 0.4% Asphalt 2.6% 65.1% 58.1% 11.1% 10.9% Plastic Building Products 23.5% 21.8% 15.9% 9.5% 3.1% Softwood 102.4% 125.3% 62.7% 25.6% -2.1% Hardwood 17.6% 37.4% 24.6 % 7.5% 0.0% Handicraft 26.0% 23.0% 15.1% 9.9% 3.0% Plywood 85.9% 114.5% 77.4% 44.5% 15.2% Chipboard and Oriented Rope Board (OSB) 108.6% 132.2% 59.9% 36.7% 11.7% Gypsum 11.9 % 18.0% 15.1% 9.6% 3.3% Insulation Material 12.8% 10.1% 10.5% 5.0% 2.4% Sand For building, gravel and crushed stone 13.3% 4.1% 3.7% 1.7% 0.2% Cement 6.8% 3.8% 3.3% 2.2% 1.8% Ready Mix 8.3% 3.1% 3.4% 2.3% 0.8% Precast Concrete Products 15.8% 7.7% 6.0% 3.8% 0.2 % Prestressed Concrete Products 13.4% 8.6% 11.8% 9.2% 6.7% Brick (clay) 8.4% 5.7% 2.8% 1.9% -0.1% Coal -3.4% 1.3% 2.8% 1.9% 0.3% Iron Ore 11.1% 10.2% 5.1% 4.2% 3.5% Scrap iron and steel 32.0% 90.7% 35.0% 12.6% 9.9% Structural steel bars, plates and shapes 20.0% 35.6% 33.6% 9.6% 3.5% Steel pipes and tubes 26.0% 36.9% 30.6% 14.7% 4.0% Structural metal products manufactured 26.9% 25.0% 23.1% 14.0% 5.7% Prefab Metal Buildings 31.1% 34.3% 23.0% 10.4% 6.0% Aluminum Factory Forms 5.2% 33.2% 19.8% 13.2% 2.5% Flat Glass 8.6% 6.5% 4.1% 3.3% 2.5% Paints, Architectural Paints 16.7% 5.5% 5.5% 3.2% 0.7% Lighting Fixtures 12.6% 3.9% 3.6% 2.5% 0.3% Plumbing Fixtures and Fixtures 9.7% 2.7% 2.1% 0.9% 0.5% Elevators and Escalators 10.2% 3.7% 3.6% 2.4% 1.1% Heating Equipment 16.5% 9.8% 9.5% 7.0% 3.0% Air Conditioning Equipment 14.0% 8.0% 6.9% 3.5 % 1.8% Copper Wire and Cable 27.4% 39.8% 19.3% 10.9% 1.8% Unleaded Regular Gasoline -0.3% 83.4% 60.4% 9.3% 0.0% Diesel Fuel 19.9% ​​127.4% 39.5% 2.9% -3.3% New Construction Input 24.7% 26.1% 18.0% 10.5% 3.8% New Residential Building Input 27.5% 28.3% 20.0% 12.1% 4.5% Input to New 21.8% 23.5% 16.1% 8.9% 3.1% Commercial Building Input 21.0% 22.3% 15.2% 8.8% 3.1% Structured Input Healthcare 22.1% 22.8% 15.5% 9.0% 3.2% Input to Industrial Structures 21.4% 19.7% 13.2% 7.5% 2.9% Input to Highways and Streets 17.4% 21.6% 15.4% 8.3% 2.9% Input to Energy and Communication Structures 20.9% 24.3% 16 9% 9.4% 3.1% Input to Educational and Professional Structures 23.7% 23.8% 15.9% 9.3% 3.1% Building Materials (PPI ‘Special Index’) 31.6% 34.1% 27.0% 14.3% 3.8% The ‘final demand’ indicators (above) reflect Prices paid by owners for setting up projects. It includes materials, labor and profits. The “Service”, “Goods” and “Energy” indicators (in the middle section of the table) are based on the “factory gate” sales prices. Input indicators (below) reflect the costs that contractors face. It excludes capital investment (i.e. machinery and equipment), labor and imports. The “input” indicators are generated from the “service” (design, legal, transportation and storage, etc.) indicators “commodity” and “energy”. Data source: Producer Price Index (PPI) series from the Bureau of Labor Statistics (BLS) Table: ConstructConnect.


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