Prices for construction materials moved higher in January, propelled by large jumps in items used in new housing and nonresidential building renovations, according to an analysis of new federal figures released Feb. 20 by the Associated General Contractors of America. Association officials said that contractors were paying more for materials even as the pending federal spending “sequestration” threatens to cancel an estimated $4 billion worth of construction activity this year.
“Contractors had to contend with huge leaps in prices for gypsum, wallboard and lumber, as well as significant increases in the cost of insulation and architectural coatings such as paint,” said Ken Simonson, chief economist of the construction trade association. “Based on pump prices for diesel fuel and price announcements by various manufacturers, it is clear that costs are rising significantly higher in February.”
The producer price index for all construction inputs — what contractors pay for construction materials — rose 0.7 percent between December and January and is now up 1.3 percent compared to 12 months ago, Simonson noted. He added that bid levels for finished structure rose at comparable rates during the past year. The index for new school buildings rose 0.9 percent; new industrial construction, 1.4 percent; new office construction 1.0 percent and new warehouses, 2.9 percent.
The producer price index for gypsum products such as wallboard and plaster soared 11.8 percent in January alone and 20.4 percent over the past 12 months, Simonson noted.