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While Commercial Construction is Up, Prices Stay Flat

May 27, 2014

Learn how costs of brick, steel, and plywood stack up.

Commercial construction is maintaining slow but steady progress in the 4-5% range, but housing is sputtering, causing total construction growth to temper slightly. For 2014, although prices were up slightly, they have flattened to virtually no change compared to last year.

After the lofty highs of 2011-2012, stainless steel continues its slide of almost 40% and is down 12% this year. Its unprecedented rise from 2009 to 2011 has reversed, and it has declined considerably from its peak. Despite the drop, however, it is double what it was a decade ago.

Since slowing last year, carpet is now registering increases and following the same slow growth pattern of the last 10 years. Common brick is up slightly. For several years, there has been steady decline, but after increased declines in 2011, brick is now down 2% over the last eight years. The ups and downs of the industry don't seem to have much of an impact on this component, indicating that the demand for it as cladding may be in a slide.

The price of paint seems to be stabilizing and may have flattened out after considerable increases in the 6-8% range. There doesn't seem to be much explanation except that after the large increases of the last two years, the market for paint might simply be catching up with itself. Plywood is flat. Although it is showing no gain over the last 12 months, watch for increases before the year is out.

Note: All data is based on indices rather than unit or quantity prices.
Source: U.S. Department of Labor, Producer Price Index

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