Building Materials Price Inflation

The Labor Department’s construction materials composite price index rose by 0.5% between December 1999 and January of this year. This brought the January 2000 composite index to a level 2.4% above its reading for the first month of 1999. On an annual average basis, the construction materials price index moved up 1.0% between 1998 and 1999 after declining by 0.5% over the previous year, so the current inflation rate represents a significant acceleration above recent trends.

Gypsum product price inflation did finally show some sign of stabilizing during the first month of this year. Average prices were essentially unchanged between December and January, but gypsum product prices were still 19.7% higher at the beginning of 2000 than during January 1999.

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Average lumber prices moved up another 0.8% during the first month of 2000, however. Lumber prices rose by a cumulative 2.8% between October 1999 and the first month of 2000, and were 6.1% higher this January than during January of 1999.

Prices of roofing materials and of structural steel products used in buildings were little changed in between December and January. For the year as a whole, average roofing material prices declined by 1.0% from their 1998 level - but began this year 1.2% higher than during January 1999. The average price for fabricated structural metal used in building construction was 2.9% higher during January 2000 than during the same month a year ago after registering modest inflation of 1.5% for full-year 1999.

Average ready-mixed concrete prices rose by a sharp 1.2% between December 1999 and this January, and were 2.0% higher during the first month of 2000 than in January of 1999. The only major construction product group to register a price decline between December and January was ceramic tile. Average tile prices moved lower for the fifth consecutive month in January 2000. For 1999 as a whole, tile prices were a marginal 0.4% higher than during 1998. But average January 2000 tile prices had moved down to a level 1.6% below the January 1999 average.