Construction materials

Rising prices for building materials spilled over into February

the Bureau of Labor Statistics (BLS) released its Producer Price Index report for February 2021. It showed the BLS construction materials and components price index was up 1.4% during the month, seasonally adjusted. This follows a 1.5% increase in December. The index was 8.0% above its level a year earlier, and most of the materials we track saw double-digit price increases for the year.

The overall prices of products processed for intermediate demand increased by 2.7%. The index was 6.6% above its level a year ago.

For reference, the changes in these indices compare to a 1.7% increase in the All-items Consumer Price Index (CPI-U) for the 12 months ending in February. The CPI-U rose 0.4% for the month.

Yield Pro (PRO) has compiled the price changes reported by the BLS for our standard list of construction products. These are raw materials whose prices directly impact the construction cost of an apartment building. The two right-hand columns of the table show the percentage change in product price from the previous year (12 MB PC change) and the percentage price change from January 2021 (1 MB PC change). If no price data is available for a given product, the change is listed as N / A.

Merchandise

PC change 12 MB

1 MB of PC change

Lumber
79.7
7.9
Hardwood
16.9
2.5
General carpentry
3.6
0.3
Soft plywood products
87.0
11.9
Hot rolled steel bars, plates and sections
15.2
9.9
Copper wire and cable
18.2
2.2
Power wire and cable
11.8
2.1
Builder’s hardware
1.3
1.0
Plumbing fixtures and fittings
0.6
0.4
Enamelled iron and metal sanitary ware
4.0
1.0
Ovens and radiators
0.8
0.1
Sheet metal products
2.2
2.6
Electric lighting fixtures
-1.7
0.7
Nails
0.4
0.1
Large appliances
2.9
0.0
Flat glass
2.3
-0.5
Ready concrete
0.8
0.3
Asphalt roofing and cladding
3.7
-0.2
Gypsum products
5.1
0.3
Mineral wool insulation
7.0
3.1

Lumber prices rose again in February, as shown in the first graph below. The continuous Random Length Lumber contract price broke the $ 1,000 level in mid-February, closing at $ 1,021.80 on February 22. However, the price of the continuous contract has since retreated, reaching $ 862 on March 15.

In contrast, the increase in lumber prices in 2018 peaked in May of the same year at $ 624.

Lumber futures prices remain close to where they were last month, with the May 2021 delivery contract trading at around $ 860. The contract for delivery in March 2022 is trading at nearly $ 700.

The price of soft plywood products followed higher lumber prices this month. The BLS said its price rose nearly 12% for the month and 87% for the year. Both of these percentage increases exceed those for lumber.

According to Madison Wood Journalist, lumber production in the United States increased 4.3% in 2020 from its level a year earlier. This despite the disruption of production in the spring when the shutdowns inspired by the pandemic were imposed. However, production was down in Canada in 2020, leaving total production for the two countries to increase only about 1 percent for the year. wood price

The following chart, below, shows the recent price history of several other building materials. Copper wires and electrical wires have increased in recent months. This month, the price of steel has also risen sharply.

The price of copper rose in February, peaking at $ 4.33 a pound on February 25, after trading between $ 3.50 and $ 3.60 a pound through most of December and January. Copper futures prices have increased in line with the spot price.

The price of aluminum also rose in February, peaking on February 23. Its price has fallen slightly since then, but remains around 23% higher than at the end of 2019.

The price of steel collapsed when the pandemic hit a year ago. It began a steady recovery over the summer months and rose from November 2020. The BLS reports that the price of steel rose almost 10% in February. MarketWatch Reports this steel is now trading over 40% above its price at the end of 2019. Steel futures indicate that the price will remain high during the summer, but could drop later in the year.

The prices of most of the other commodities tracked in this chart have been relatively stable despite the market disruption caused by COVID-19.

The price changes for many of the more finished products in our sample are shown in the final table below. The prices of these items appear to continue their recent trend of growing at a rate slightly above the general rate of inflation in the economy.lighting prices

The full BLS report can be found here.


Source link