The increase in construction materials prices has slowed to 3-4% from 8% in 2011. This is the third straight year of increases following five years of decline. Steel prices rose 6% and lumber declined nearly 5%. Asphalt’s inflationary cost follows crude oil; likewise for copper and stainless steel, which have moderated to reflect the value of precious metals. Hot rolled steel bar (rebar) spiked 4-5% in the last 12 months and could increase again due to the rising cost of steel.
The price of concrete block remains flat due to lack of demand. Precast concrete, however, has maintained 3-4% price increases over the last 36 months, likely due to the building industry’s recovery. Crushed stone has risen 25% over the last five years, and though the rate of increase has slowed, it continues to rise with 2-4% growth forecast for this year. Glass has also stayed flat over the last 24 months except a brief spike of 4-5% in early 2009.
Following a strong finish in 2011, construction spending slowed in the first quarter of 2012 but still grew 8% over the last 12 months. Most segments demonstrated gains except hospitality and religious.
Note: All data is based on indices rather than unit or quantity prices. Source: U.S. Department of Labor, Producer Price Index