Building Materials Price Inflation: October 2002

Average construction material/supply prices declined by 0.4% from September to October. This was the first time this year that average prices eased on a month-to-month basis, although the increases have been uniformly small. Compared with October of last year, average prices received by U.S. manufacturers of construction supplies and materials during October 2002 were up by a cumulative 1.8%, a relatively moderate rise given the unrelenting upward trend during the first three quarters of this year, but a sharp contrast to the 0.9% drop in average prices from 2000 to 2001.

Overall lumber prices rose by 0.3% during October, only the second time in the past six months that average prices have increased. Consequently, the price index covering all softwood and hardwood lumber was only 0.8% higher during October 2002 than it was during the same month of 2001.

Gypsum product prices, which had eased during two of the previous three months, were 1.6% higher in October than in September. From March to June, gypsum product prices had soared by almost 8%. So average gypsum product prices this October were 6.8% higher than during October 2001 after declining by 22.3% (on an annual average basis of measure) from 2000 to 2001. Still, this was a much more moderate increase than the double-digit over-the-year gains registered in every month from May to September of this year.

Average price changes in other product categories from September to October were very small (0.3% or less), with two exceptions. The price index for unitary air-conditioning units fell by 0.8% after trending gradually higher throughout most of this year. And average prices charged for asphalt shingles and similar petroleum-based roofing products increased by 0.8%.

Average prices were lower this October than in October 2001 for structural steel (-2.9%), ready-mix concrete (-0.9%), flat glass (-0.5%), asphalt/tar shingles (-0.3%), lighting fixtures (-0.1%) and hand/edge tools (-0.1%). Prices rose during the 12 months ending in October 2002 for gypsum products (+6.8%), builders' hardware (+1.8%), unitary air-conditioning units (+1.6%), brick (+1.3%), plumbing products (+1.1%), ceramic tile (+1.0%), paving asphalt (+0.9%) and lumber (+0.8%). The price composite covering the full range of construction materials and supplies was 1.8% higher this October than in October 2001.