Stunning material cost increases are shown in two tables and 24 graphs


0

There is an important story that has emerged in what, hopefully, the end days of the epidemic are related to shortages and high costs. The US Consumer Price Index (CPI) for all items, which has been consistently below + 2.0% year over year for an extended period, suddenly rose to + 4.2% year on year in April, as a result of moving + 0.8% in just one month. As everyday shoppers, you and I may feel that we have something we lack. But consider the distress of the unfortunate contractual community. Our mounting frustrations about the expense and the blockaded contractors face diminish. Table 1 shows price increases over the year and the last three months for 15 major building materials and some key components of building products (such as aluminum in ventilation systems). Table 1 is a subset of Table 2 that appears at the end of this article and includes a comprehensive list of building material inputs and specific indicators. All numbers come from the PPI data set compiled by the Bureau of Labor Statistics. Of the fifteen items in Table 1 and for year-to-year and month-to-month time frames, there is only one instance of a diminishing index value, -2.9% m / m for iron and steel scrap. But also note that yoy iron and steel scrap is + 77.2%. Four items in the left column of Table 1 have doubled in price over the past year: softwood, + 121.1%; Particleboard and OSB, + 105.9%; Regular gasoline + 245.3%; And diesel fuel, + 126.7%. The upward price movements of “forestry” and “steel” products have continued for some time. Recently, our interest has sparked, however, the accelerating price trends of aluminum, copper wire and cable factory shapes. The former is + 20.5% y / y and + 9.9% m / m; The latter, + 30.9% y / y and + 8.6% m / m. In principle, it is often easier to understand what happens when one sees an image. Cluster charts 1 to 6 display the history of price indices for 24 material indicators related to PPI construction. Table 1: US Building Material Cost Changes from the PPI Series – April 2021 Data Source: Bureau of Labor Statistics (BLS) Charts: ConstructConnect. Forestry and Wood Products in Chart 1, the softwood, plywood, and particle board / OSB price index curves have risen recently and reached new highs. Although gypsum didn’t take off into orbit in the same dramatic way, it remains high for its history. Chart 1: Building Material Costs in the United States (1) – From the PPI series the last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) series, Not Seasonally Adjusted (NSA) Charts: ConstructConnect. Steel Products In Chart 2, the “bars, sheets and structural shapes” price index curve is escalating, although it still has a road ahead of it commensurate with its height in 2008. “Steel pipes and tubes” and “prefab metal building” However, the curves have arrived. To new heights. Chart 2: Building Material Costs in the United States (2) – From the producer price index (PPI) series the last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), PPI series, not Seasonally Adjusted (NSA) Charts: ConstructConnect. Cement, Concrete, and Brick All the curves in Chart 3 show a more stable and less volatile progress in price increases over the past decade. However, it is also currently as high as it has been since the corner flipped in the new century. The highest percentage change for the year / year shown in the Graph 4 text boxes is + 3.8% for clay bricks. Chart 3: Building Material Costs in the United States (3) – From the producer price index (PPI) series the last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) series, Not Seasonally Adjusted (NSA) Charts: ConstructConnect. Core Materials From Chart 4, iron ore and coal prices are exceptions to the general escalation rule these days, as they are moving sideways. However, aluminum and copper definitely jumped on the bullish price elevator. Chart 4: Building Material Costs in the United States (4) – From the producer price index (PPI) series the last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), Producer Price Index (PPI) series, No Seasonally Modified (NSA) Charts: ConstructConnect. Fiberglass and energy-derived products The PPI (which measures prices when goods exit through the “gates” of factories or refineries) for regular unleaded gasoline is + 245.3% year over year, but this is still much lower than the previous peak. Incidentally, the most recent CPI Series Gasoline Sub Index gauge (meaning “at the pump”) is + 49.6% year over year. Diesel PPI also saw significant gains, + 126.7% year over year and + 19.6% month over month. The price of asphalt for roads increased by nearly two-thirds (+ 64.3%) year on year and by half (+ 49.3%) in April alone. It appears likely that a major infrastructure spending initiative (including road construction), as proposed by the new administration in Washington, will be affected slightly more by the dangerously escalating cost structure. Graph 5: US Building Material Costs (5) – From the PPI series The last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), PPI series, no adjustment Seasonally (NSA) Charts: ConstructConnect. Accessories and Arteries The largest annual progression of the four building products shown in Chart 6 was + 4.7% for Paints and Coatings. Because titanium is a stronger and lighter metal than steel, it is used in spacecraft framing. Since it binds well with human bones, it is used in hip and knee joint replacement and dental work. In the course of construction, though, titanium is an important component of the paint’s white pigment. Following a similar pattern to many other metals, the price of titanium is on a rebound. Chart 6: Building Material Costs in the United States (6) – From the producer price index (PPI) series the last data points are for April 2021. Data source: US Bureau of Labor Statistics (BLS), PPI series, not Seasonally Adjusted (NSA) Charts: ConstructConnect. Table 2: US Producer Price Index (PPI) Results The percentage change in the April 2021 index from: 3 years 1 year 6 months 3 months ago a month ago Final demand / service / goods / energy / input: building final demand 10.5% 2.1% 2.2% 1.8% 1.1% Building new warehouses 9.5% 1.8% 2.7% 2.1% 2.0% Construction of new school buildings 10.7% 1.1% 1.4% 1.3% 0.9% Construction of a new administrative building 11.5% 3.5% 3.4% 2.6% 0.5% Construction New Industrial 11.8% 1.6% 1.1% 0.9% 0.7% New healthcare construction 10.6% 2.6% 2.5% 3.2% 2.5% Architectural and engineering services 5.3% 2.5% 2.5% 0.8% 0.2% Construction machinery and equipment 9.5% 1.4% 1.4% 0.3% 0.1% asphalt 30.6% 64.3% 67.0% 49.3% 16.3% plastic building products 16.7% 14.2% 10.0% 7.8% 3.3% softwood 87.6% 121.1% 28.7% 22.7% 6.4% hardwood 15.2% 31.6% 29.2% 15.7% 3.5% 18.9% 14.0% 6.9% 3.9% 1.8% Plywood 45.5% 70.4% 27.6% 30.4% 10.0% Particleboard and OSB 77.0% 105.9% 23.0% 24.9% 9.8% Gypsum 2.8% 12.1% 13.0% 5.7% 3.9 % Insulating materials 7.5% 5.2% 6.8% 3.1% 0.1% sand, gravel and crushed stone constructions 1 3.0% 3.6% 3.2% 0.5% 0.7% Cement 6.3% 2.5% 1.5% 1.1% 0.4% Ready-mix Concrete 7.0% 2.0% 2.1% 2.2% 1.5% Precast Products 14.1% 5.3% 4.5% 2.8% 1.6% Precast Concrete Products Stress 8.3% 0.2% 3.0% 1.9% 1.3% Brick (clay) 6.5% 3.8% 1.1% 0.7% 0.1% Coal -3.2% 1.0% 1.8% 1.5% 1.9% Iron Ore 15.4% 6.5% 3.4% 0.6% 0.6% Scrap Iron and steel 11.5% 77.2% 48.5% -2.9% -2.4% Steel bars, sheets and structural shapes 22.4% 26.3% 32.3% 22.4% 5.1% Steel pipes and tubes 23.8% 24.4% 26.6% 19.8% 7.4% Fabricated structural metal products 15.9% 12.7 12.9% 9.7% 2.8% prefab metal buildings 22.4% 23.8% 20.1% 11.3% 1.3% aluminum factory shapes 6.6% 20.5% 17.9% 9.9% 7.5% flat glass 5.8% 4.0% 3.7% 1.7% 0.6% Architectural paints coatings 16.2% 4.7% 4.0% 3.9% 2.1% Lighting fixtures 11.4% 2.7% 2.2% 1.9% 1.4% Plumbing fixtures and fittings 9.2% 2.3% 1.7% 1.7% 0.4% Elevators and escalators 8.4% 1.7% 1.6% 1.6% 0.5% Heating equipment 16.1% 6.6% 6.4% 6.1% 3.8% Air-conditioning equipment 13.1% 5.1% 4.7% 2.9% 0.8% copper wire and cable 18.5% 30.9% 1 7.8% 8.6% 2.0% unleaded regular gasoline 0.7% 245.3% 57.5% 29.2% 0.4% diesel fuel 20.9% 126.7% 49.6% 19.6% -8.0% new construction input 17.6% 18.8% 9.7% 7.3% 2.0% residential building input New 19.2% 19.8% 9.0% 8.4% 2.7% Residential construction 15.8% 17.6% 10.6% 6.2% 1.5% Commercial building inputs 15.2% 16.0% 10.4% 5.9% 1.6% Healthcare structures input 16.2% 16.7% 10.0% 6.0% 1.8% Inputs to industrial structures 16.2% 14.9% 9.9% 5.2% 1.5% Inputs to highways and streets 12.1% 16.2% 10.3% 5.4% 1.0% Inputs to energy and communication structures 14.6% 18.3% 11.3% 6.7% 1.7% in educational and professional structures 17.7% 17.4% 10.1% 6.4% 2.0% Building materials (PPI “special index”) 24.8% 23.8% 17.7% 13.8% 5.2% The indicators of “final demand” (above) reflect the prices paid by owners to construct projects. It includes materials, labor and profits. The “service”, “goods” and “energy” indicators (in the middle section of the table) are based on “factory gate” sales prices. The “Inputs” 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, transport and storage, etc.) the “commodity” and “energy” indicators. Data source: Bureau of Labor Statistics (BLS) Product Price Index (PPI) series Table: ConstructConnect.


Like it? Share with your friends!

0

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
Joseph

0 Comments

Your email address will not be published.