The cost of construction materials fell 0.3 percent in January, according to the Feb. 19 producer price index (PPI) report by the U.S. Department of Labor. This is the fourth consecutive month construction materials prices decreased; however, prices are still up 1.8 percent from January 2008.
“One of the few bright spots in the economy is that we live in subdued inflationary times,” said ABC Chief Economist Anirban Basu. “Both consumer prices and producer prices have been in retreat, a reflection of extraordinarily weak demand for goods and services throughout the global economy. This weakness certainly has become apparent in commodity prices, which generally have traded lower.”
Prices for fabricated structural metal products fell for the third straight month, down 1.4 percent, but are still up 10.2 percent from the same time one year ago. Plumbing fixtures and fittings prices edged up 0.5 from December 2008 and are up 4.3 percent from last January. Prices for fabricated ferrous wire products continue to decline, down 0.8 percent from last month, but are still posting prices 18.4 percent higher than January 2008. Softwood lumber prices decreased for the fifth straight month, down 3.5 percent from December and 8.5 percent from a year ago. Asphalt felts and coatings prices fell for the third straight month, down 2.5 percent, but are still 50.4 percent higher than last January.
“It is not clear whether Congress considered the presence of falling construction materials prices in forging the economic stimulus package, signed into law by President Obama,” said Basu. “Had they done so, Congress likely would have bolstered investment in infrastructure, since the decline in construction input prices signifies that the government can purchase more infrastructure per dollar. The falling construction input prices also accelerate the pace of the eventual recovery in nonresidential construction, since developers and others will be better positioned to forge ahead with their projects.”
Crude energy prices decreased 8.1 percent in January following a 5.5 percent decrease in December. Overall, U.S. wholesale prices rose 0.8 percent following five straight months of declines, but are still down 1 percent from a year ago.
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