Supply House Times

PPI for materials slips but price hikes loom for some

November 21, 2012
Nonresidential construction starts jump.

The producer price index (PPI) for finished goods fell 0.2% in October, not seasonally adjusted (also -0.2%, seasonally adjusted) and rose 2.3% over 12 months, the Bureau of Labor Statistics (BLS) reported on Wednesday. The PPI for inputs to construction - a weighted average of the cost of all materials used in construction plus items consumed by contractors such as diesel fuel-decreased 0.4% for the month, after climbing 0.9% for two consecutive months.

Prices for key construction inputs have moved sharply in both directions since PPI data was gathered in mid-October. Scrap steel prices have climbed and steel makers have responded with numerous price increase announcements.

In other news, the value of nonresidential construction starts in October jumped 20% from a year earlier, Reed Construction Data reported, based on data it collected. Starts for the first 10 months of 2012 combined rose 10.5% from the same period in 2011. Nonresidential building starts climbed 8.7% year-to-date, with gains of 17.5% for commercial starts; industrial (manufacturing) starts, 12.5%; and institutional starts, 3.0%. Heavy engineering (nonbuilding) starts rose 13%.

For more information, view the October PPI table here.


Source: AGC of America

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