Construction Materials Price Index Rises 1.4% in April

Posted by Rumin Mann
May 19th, 2011

The surge in construction materials prices continues to ebb with the monthly gain in April falling to 1.4% from 2.0% a month earlier. World commodity prices have dropped sharply since the price survey week (2nd week of April) so monthly materials price inflation is expected to weaken further in the next few months.

The significant price increases in April were diesel fuel (5.7%), nonferrous pipe and tube (3.5%), structural steel (3.2%), softwood plywood (2.8%) and plastic resins (2.6%). The jump in plywood prices is unrelated to the world commodity situation and is not a sustainable trend. The metal price spikes are spillover from previous huge ore and scrap price gains. More price rises may be ahead for a few months but at a slower pace. Similarly, the diesel and plastic resin price increases come from the sharp rise in crude prices earlier in the year. Crude prices have fallen $16/bbl. since the price survey week and diesel prices have been steady at $4.10/ gal. Next months report will show diesel prices steady to slightly down although resin prices may rise slightly more.

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