2000: Low Inflation for Most Construction Materials Markets

The Labor Department's construction materials composite price index was unchanged between November and December of last year. The composite index had declined for eight con- secutive months prior to December, after reaching an annualized peak rate of 2.7% inflation during March of 2000. The December 2000 composite index level was 0.5% lower than in December of 1999. On an annual average basis, the price index for all construction materials rose 0.9% between 1999 and 2000—little changed from the 1.0% gain recorded the year before.

Average lumber prices dropped 0.2% between November and December—the tenth straight month that prices have declined for this product group. Average prices during December 2000 were 9.6% lower than during the same month of 1999.

Gypsum product prices also continued to decline during the final month of last year, falling 2.9% from the November level. The price index for this "boom or bust" product group has now declined for 10 consecutive months, after soaring to a peak inflation level of more than 20% over the final quarter of 1999. The December 2000 gypsum product price index was 27.2% lower than during the final month of 1999.

Average roofing material prices rose during December—for the eighth time in the previous nine months—although by only a scant 0.1%. The Labor Department reported that the December 2000 average price for roofing materials was 4.8% higher than during December of 1999. Oil prices have begun to decline—albeit slowly, compared to the rapid rise during the spring and summer of 2000—so we'd expect to see asphalt shingle prices begin to ease a bit more during the early months of the new year.

Ready-mixed concrete prices also rose by a slight 0.1% between November and December, following two consecutive months of (slight)decline. Concrete was, on average, 3.2% more expensive in December of 2000 than during the final month of 1999.

Average prices for fabricated structural metal used in construction, on the other hand, were down 0.7% during December 2000, to bring year-end 2000 prices back to exactly the same level they were at during December 1999. Ceramic tile product prices rose for the third straight month—by 0.3% in December—but the composite price index for tile still ended the year at a level 2.8% lower during December 1999.