Building Materials Price Inflation: Novem002

Average construction material/supply prices declined by 0.3% from October to November. This was the second consecutive month of decline in average prices for this product group composite, after steady if small gains throughout the first three quarters of 2002.

Overall lumber prices rose by 0.1% during November. Only three of the other 12 specific construction product categories that we track from the Labor Department's monthly Producer Price Index survey recorded any increase from October to November of this past year.

Gypsum product prices, which had increased by 1.6% during October, fell by 1.0% in November. Several other product groups registered a decline in average prices of 0.5% or greater from October to November 2002: asphalt/tar shingles (-1.5%), plumbing fixtures and products (-0.7%), ready-mix concrete (-0.7%), hand/edge tools (-0.5%) and ceramic floor and wall tile (-0.5%).

Average prices were lower this November than during November 2001 for structural steel (-3.1%), asphalt/tar shingles (-1.9%), flat glass (-0.8%), ready-mix concrete (-0.6%), hand/edge tools (-0.6%), lighting fixtures (-0.4%) and gypsum products (-0.2%). Prices had risen over the 12 months ending in November 2002 for builders' hardware (+1.9%), unitary air-conditioning units (+1.8%), brick (+1.6%), lumber (+1.6%), ceramic tile (+1.0%), paving asphalt (+0.9%) and plumbing products (+0.1%).

The price composite covering the full range of construction materials and supplies was 1.7% higher this past November than during November 2001. Despite increases in most months of 2002, the annual average composite price index for construction materials/supplies will end up less than 1% higher during 2002 than in 2001. And although we forecast that average construction product prices will be up again over the course of 2003, the annualized increase should again be on the order of only about 1%.