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Construction Inflation 2023

1-18-23  Construction Analytics PPI Tables and Building Cost Index

Construction Inputs to Nonresidential Buildings dropped for five of of last six months, now down 5.2% since June, but still up 7.2% since last December. However, the average index for 2022, when compared to the average for 2021, is up 15.7%.

The average growth for the year accounts for all the peaks and valleys within each year and is the value carried forward into the index tables and charts. A glaring example of the difference between Dec/Dec tracking, or year over year, and annual average tracking, is Steel Mill Products which is down 28.7% Dec22/Dec21, but the annual average for 2022 is still up 9.0% from the average 2021. In fact, the last three years show Dec/Dec combined inflation is +71%, but the annual averages for the last three years show total inflation growth of 87%. Annual averages should be used to report inflation.

Residential inputs are down seven of the last eight months, down 7.1% since April, but still up 7.1% since last December. The average for 2022, when compared to the average for 2021, is up 12.7%.

Several major cost components have been on decline the last few months: Lumber/Plywood, Steel Mill Products, Fabricated Steel, Steel Pipe and Tube, Aluminum and Diesel Fuel. Of the 15 items tracked here, 10 declined in the last quarter. Concrete is the only product that has not posted any monthly decline in 2022. Costs are still high, but are moving in the right direction after 1st quarter 2022 costs that averaged +7% (28%annual) to +8%. Historically, most cost increases are posted in the 1st quarter and the least in the 4th quarter.

Final Demand PPI, or Selling Price, represents contractors bid price to client. Includes labor, material, equipment, overhead and profit. Labor includes change in wages and productivity. Every three months (Jan, Apr, Jul, Oct) BLS performs an update survey to correct these Final Demand indices. For the past six quarterly updates about 80% to 90% of the change in the index was posted in the update month. Therefore, Final Demand indices should not be referenced monthly. These are quarterly indices. January is an update month, so most of the index reported in Jan. refers to Nov. and Dec.

The final demand PPI index for nonresidential buildings is substantially higher than Construction Analytics nonresidential buildings cost index reported in the index tables. These PPI values are but one of the references used to develop construction analytics building cost index. They are higher than the CA BCI.

Current and predicted Inflation rates updated 1-18-23:

  • 2020 Rsdn Inflation  4.5%, Nonres Bldgs 2.6%, Non-bldg Infra Avg -0.3%
  • 2021 Rsdn Inflation 13.9%, Nonres Bldgs 7.4%, Non-bldg Infra Avg 7.9%
  • 2022 Rsdn Inflation 16.1%,Nonres Bldgs 12.9%, Non-bldg Infra Avg 13.8%
  • 2023 Rsdn Inflation 1.9%, Nonres Bldgs 4.0%, Non-bldg Infra Avg 4.3%

Construction Analytics Building Cost Index and other industry references

In the table above, dividing the current year by the previous year will give the current year inflation rate. All indices are the average rate for the year.

How to use an index: Indexes are used to adjust costs over time for the effects of inflation. An index already compounds annual percent to prevent the error of adding annual percents. To move cost from some point in time to some other point in time, divide Index for year you want to move to by Index for year you want to move cost from. Costs should be moved from/to midpoint of construction, the centroid of project cost. Indices posted here are at middle of year and can be interpolated between to get any other point in time.

Previous year Construction Inflation 2022 – updated 12-10-22
Previous yr PPI PPI Tables 2022 Producer Price Index to NOV’22
Links to Data Sources Construction Inflation >>> Links

PPI Tables 2022 Producer Price Index to NOV’22

PPI tables show input costs and final costs monthly to nonresidential buildings and residential. Here I use that information to track year-to-date (ytd). SEE the latest information at the bottom of this post.

January Inputs PPI is up 2.6% in nonresidential and 3.3% for residential. Most of the inputs reported here are up less than 2% YTD, but Lumber/Plywood is up 15%. Final costs of contractors is up 1% to 5% and final cost of buildings is up 3% to 6%. SEE also Construction Inflation 2022

3-23-22 update Input Costs through February 2022 to nonresidential buildings up 4.5% year-to-date, residential up 6.4%. Inputs to residential went up 3.0% in Feb. In a typical year of 4% inflation, costs would increase only 0.25% to 0.50% per month. Residential is up 6%+ after the first two months! Most of the inputs reported here are up less than 2% for February, except Lumber/Plywood up 4.1% and Aluminum up 6.2%. Year-to-date, for two months, Lumber/Plywood is up 20% and aluminum is up 12.1%. Watch copper, up 4.9% ytd, for potential world situation interfering with supply. Final costs of contractors and final cost of buildings changed very little in February. Range is mostly up 2% to 4% ytd, but up to 6% year-to-date. 4-12-22 edited, corrections.

4-13-22 update > Input Costs through March 2022 to nonresidential buildings up 7.5% year-to-date, to residential up 9.5% ytd. In a typical year of 4%-5% inflation, costs would increase only 0.25% to 0.50% per month. Residential is now up 9% after the first 3 months of 2022! Keep in mind when reading these year-to-date (YTD) results, these are cumulative for 1st quarter 2022. That’s not a guess at year end results.

The only inputs reported here up more than 2% for March are Lumber/Plywood, up 5.1%, and Aluminum, up 6.2%. Year-to-date, for 3 months, Lumber/Plywood is up 26% and aluminum is up 19.1%. Watch copper, up 7.2% ytd, for potential world situation interfering with supply. Final costs of contractors and final cost of buildings changed very little in February or March. The final cost average of 5 building types is up 5.2% ytd in the first 3 months of 2022.

The PPI inputs through the 1st quarter is putting pressure on the nonres bldgs index for 2022 to move higher than forecast.

5-8-22 Correction to 2020 and 2021 Totals

I had taken the 2020 and 2021 totals from the AGC PPI reports. However, all analysis by Construction Analytics reports inflation as the annual average. AGC reports the annual growth as the December value, so compares Dec to previous Dec. That does not represent annual growth. For example, some costs in 2021 maintained a level 3% annual growth rate for 9 months then rapidly increased to 9% in the final 3 months. AGC reports the annual growth at 9%, whereas the annual average is 4%. Inflation rate reporting must be consistent, you cannot mix Dec/Dec and annual average. Therefore, all PPI data has been edited using the original source data from Bureau of Labor Statistics.

5-12-22 Construction PPI for April Construction Inputs post slowest monthly gains so far this year.

Nonresidential Inputs up 0.9% in Apr, up 10.0% YTD. Residential Inputs up 0.8% in Apr, up 15.6% YTD

Final Demand (Selling Price) Nonres Bldgs post strong gains in 1st 4 months, up 4.1% in April, up 9.0% ytd. Warehouses up 12% ytd.

6-14-22 Construction PPI for MAY Construction Inputs to residential post, for second consecutive month, slowest monthly gains so far this year.

May PPI data for construction > Big gainers from 2021 have slowed in 2022, Lumber, Steel, Sheet Metal, Rubber/Plastics, Copper. New gainers in 2022 are Ready Mix Conc, Conc Pipe, Paving Mixtures, Gypsum. We could see the same levels of inflation as last year, just from different products.

Final Demand pricing is updated every 3-4 months. Just had a major revision in April, some items increased by 50-75%. May increases look low, but the next revision month could change that, as did April. Better to look at this indicator quarterly, after the revision month.

7-14-22 Construction PPI for JUNE Construction Inputs to residential down for thrid consecutive month.

June PPI data for construction > Biggest gain in June is Deisel Fuel, up 14.1%, up 93.8% year-to-date. Biggest decline is Lumber/Plywood, down 14.7% in June, now down 1.9% ytd.

Final Demand (Selling Price) of nonresidential buildings and trades continues to climb, buildings on average up 0.5% in June, up 9.5% ytd, trades up 1.0% for June, up 8.1% ytd.

In this June report, there are many instances where FRED has revised number in previous 2022 months, mostly in the prior two months, but in some cases back to January. So, the year-to-date change from May to June will not match the May ytd previously reported x the June change.

8-12-22 Construction PPI for JULY Construction Inputs to residential down for third consecutive month.

July PPI data for construction > Biggest gainers in July – Ready Mix Concrete posts largest monthly gain of the year, up 2.7%. Now up 9% in 7 months, also up 9.3% compared to same 7 mo 2021. Biggest decliner – Diesel Fuel, down 16% for the month. Now up 62% for first 7mo of 2022, but up 77% compared to same 7mo in 2021.

Final Demand (Selling Price) of nonresidential buildings and trades continues to climb, buildings on average up 6.2% for 2nd quarter (M,J,J), up 12% ytd. Trades up 5.7% for Q2, up 12.5% ytd.

Material Inputs PPI represents change in cost of producing those materials. Average material cost is about 50% of final bldg cost. But with several margins tacked on before install, PPI $ represents less than half of final bldg cost, perhaps 40%.

Final Demand PPI, or Selling Price, represents contractors bid price to client. Includes labor, mtrl, equip, overhead and profit. Labor includes change in wages and productivity. Every three months (Jan, Apr, Jul, Oct) BLS performs an update survey to correct these Final Demand indices. For the past three quarterly updates about 80% to 90% of the change in the index was posted in the update month. Therefore, they should not be referenced monthly. These are quarterly indices.

9-14-22 Construction PPI for AUGUST

Construction Inputs to nonresidential buildings dropped for the second consecutive month after posting only a 0.4% increase in June, now down -2.4% for the past three months, but still up 9.8% year-to-date. Residential inputs are down for the fourth consecutive month, down -4.4% since April, up 10.1% ytd. Costs are still high, but are moving in the right direction after 1st quarter costs that averaged +10% to +15%. Historically, most cost increases are posted in the 1st quarter and the least in the 4th quarter.

Average of all inputs for nonresidential buildings is up 18.6% for eight months 2022 compared to the same months 2021. Avg inputs for residential compared to 2021 is up 14.9%

  • Ready Mix Concrete, up 7 of 8 months, ytd is up10.2%
  • Lumber/Plywood, down 4 of the last 5 months a total 28%, ytd down -6.7%
  • Fab Str Steel, down -2.1% the last two months, up 11.5% ytd
  • Diesel Fuel, down -28% in last 2mo, up 43% ytd

PPI $ represents less than half of final bldg cost, perhaps 40%.

It will take two more months before we see the effect these changes have on Final Demand PPI, which is updated every three months. Next update is to October data released mid-Nov. Every three months (Jan, Apr, Jul, Oct data) BLS performs an update survey to correct these Final Demand indices. For the past three quarterly updates about 80% to 90% of the change in the index was posted in the update month. Therefore, they should not be referenced monthly. These are acting like quarterly indices.

10-14-22 Construction PPI for SEPTEMBER

Construction Inputs to nonresidential buildings dropped for the third consecutive month after posting only a 0.4% increase in June, now down -3.1% for the past three months, but still up 9.5% year-to-date. Residential inputs are down for the fourth consecutive month, down -6.0% since April, up 8.3% ytd. Several major cost components have been on decline the last few months: Lumber/Plywood, Steel Mill Products, Fabricated Steel, Steel Pipe and Tube, Aluminum and Diesel Fuel. Costs are still high, but are moving in the right direction after 1st quarter costs that averaged +7% (28%annual) to +8%. Historically, most cost increases are posted in the 1st quarter and the least in the 4th quarter.

Costs for the last four quarters for all inputs for nonresidential buildings are up 12.5%. Avg inputs for residential for the last four quarters are up 9.7%. The average cost for the last 4 quarters (last 12 months) for the 15 input products I track is up 13.9%.

  • Ready Mix Concrete, up 10.7% year-to-date (YTD), up11.6% last 12 months.
  • Lumber/Plywood, up 30% in Q1 but down 11.4% ytd, up 9.1% last 12 months
  • Fab Str Steel, up 11.2% ytd, up 16.6% last 12 months
  • Diesel Fuel, down -17% in 2 of last 3mo, up 60% ytd, up 66% last 12 months

PPI $ represents less than half of final bldg cost, perhaps 40%.

Final Demand PPI is updated every three months. Next update is to October data released mid-Nov when we will see the third quarter, Aug-Sep-Oct, for 2022. Every three months, (Jan, Apr, Jul, Oct data), BLS performs an update survey to correct these Final Demand indices. For the past six quarterly updates about 80% to 90% of the change in the index for the previous quarter was posted in the update month. Therefore, they should not be referenced monthly. Two months are extremely low to the average and the third month is extremely high. Also, the January index is an update month, so most of the index reported that month refers to Nov and Dec, so should not be counted in 2022. Therefore, I chose to report the quarters as reported and updated by BLS. The quarters are FMA, MJJ, ASO, NDJ.

11-15-22 Construction PPI for OCTOBER 2022

Since June, PPI Input costs have been in decline. However Final Demand costs lag and have not posted any declines in at least the last 6 quarters.

Construction PPI Data for Oct’22 > Inputs to Nonres Bldgs UP 9.5%ytd, 12.4% last4qtr. Inputs to Rsdn UP 7.6%ytd, 9.2% last4qtr

FRED corrects Final Demand values quarterly, Jan,Apr,Jul,Oct. Oct value corrects entries for Aug&Sep. Most recent qtr lowest in last4qtrs.

Final Demand PPI is updated every three months. October Final Demand data released mid-Nov represents the correction value for the third quarter, Aug-Sep-Oct. Every three months, (Jan, Apr, Jul, Oct data), BLS performs an update survey to correct these Final Demand indices. For the past six quarterly updates about 80% to 90% of the change in the index for the previous quarter was posted in the update month. Therefore, they should not be referenced monthly. Two months are extremely low to the average and the third month is extremely high. Also, the January index is an update month, so most of the index reported that month refers to Nov and Dec, so should not be counted in 2022. Therefore, I chose to report the quarters as reported and updated by BLS. The quarters are FMA, MJJ, ASO, NDJ.

12-10-22 Construction PPI for NOVEMBER 2022

Since June, PPI Input costs have been in decline. However Final Demand costs lag and have not posted any declines in at least the last 6 quarters. PPI Input$ represent only about 30% to 40% of Final Demand cost.

Construction PPI Data for Nov’22 > Inputs to Nonres Bldgs UP 9.2% ytd, 12.5% last4qtr. Inputs to Rsdn UP 8.2% ytd, 9.3% last4qtr.

For the last 6 months Inputs to nonresidential construction are down -3.0% and to residential are down 5.9%.

FRED corrects Final Demand values quarterly, Jan, Apr, Jul, Oct. Oct value corrects entries for Aug & Sep. Most recent qtr lowest in last4qtrs. We will not get another reliable indicator to Final Demand cost until January when FRED will issue the corrections to Nov and Dec.

Final Demand PPI is updated every three months. October Final Demand data released mid-Nov represents the correction value for the third quarter, Aug-Sep-Oct. Every three months, (Jan, Apr, Jul, Oct data), BLS performs an update survey to correct these Final Demand indices. For the past six quarterly updates about 80% to 90% of the change in the index for the previous quarter was posted in the update month. Therefore, they should not be referenced monthly. Two months are extremely low to the average and the third month is extremely high. Also, the January index is an update month, so most of the index reported that month refers to Nov and Dec, so should not be counted in 2022. Therefore, I chose to report the quarters as reported and updated by BLS. The quarters are FMA, MJJ, ASO, NDJ.

PPI TRENDS

A few years back I looked at PPI historical data. This is what I found.

  • 60% of the time, the highest increase of the year in the PPI is in the first quarter.
  • 75% of the time, two-thirds of the annual increase occurred in the first six months.
  • In 25 years, the highest increase for the year has never been in Q4.
  • 60% of the time, the lowest increase of the year in the PPI is in Q4.
  • 50% of the time, Q4 is negative, yet in 25 years the PPI was negative only four times.

Since the onset of the pandemic, Feb 2020, residential construction inflation is up 33%, nonresidential up 20%. If you are a residential contractor, take 33% off the top of your revenue growth from Feb20 to Nov22. What remains is your business volume growth. Is your business growing?

Current and predicted Inflation rates updated 12-10-22:

  • 2020 Rsdn Inflation  4.5%, Nonres Bldgs 2.6%, Non-bldg Infra Avg -0.3%
  • 2021 Rsdn Inflation 13.9%, Nonres Bldgs 7.4%, Non-bldg Infra Avg 7.8%
  • 2022 Rsdn Inflation 15.4%, Nonres Bldgs 12.2%, Non-bldg Infra Avg 13.6%
  • 2023 Rsdn Inflation 6.0%, Nonres Bldgs 4.8%, Non-bldg Infra Avg 4.3%

October Record Increase to Construction Inflation 11-10-21

What’s the Construction Inflation rate?

From Sept to Oct construction materials input price changes were normal, but Final Demand prices for October increased in one month by what could be considered an entire year’s increase. We’ve been watching the price pass thru catch up slowly, until now.

This is the single largest monthly increase in Final Demand pricing since final demand records began in 2006. Prior to this, based on changes in recent months, I expected future cost increases to add on slowly. So I wasn’t expecting the huge jump all at once. This may be some increases that were occurring over a few months that finally got captured in the index.

In October, the Final demand cost for Buildings and Trades averaged +12% year-to-date. In July, August and September it was between 5% and 6%. A change like this in one month has never occurred before. In fact, this one-month change is greater than any annual change on record. So, it resets the baseline for all forecasts.

For Oct, Nonresidential Buildings 2021 inflation is estimated at 6.8% and Residential at 15%. The forecast for 2022 is estimated at 4.5% for nonresidential buildings inflation and 7% for residential. See inflation and PPI data on my blog for more.

It must be noted that huge jump in nonresidential buildings inflation may not yet be picked up in many of the industry indices that we reference. Construction Analytics BCI is now updated to include the 11-10-21 PPI final demand inflation. Some sources update only quarterly, some semi-annually. After this event, I would expect to see a change in most other sources, which may update sometime over the next quarter.

One important thing, when inflation turns out to be higher than you thought, that means productivity is lower than you thought.

See Inflation – PPI data Jun to OCT Updated 11-10-21

Also see 2021 Construction Inflation – updated 11-10-21

Inflation – PPI data Jun to OCT Updated 11-10-21

7-15-21 Final demand pricing is still well below materials price increases. However, it’s hard to visualize how more of the cost does not get passed on to consumer. I’m expecting future reports will show final cost inflation increasing.

11-10-21 Got That ^ right.

10-14-21 My current forecast for inflation in 2021 is now 4.5% for nonresidential buildings and 13% for residential. Residential inflation seems to have slowed but nonresidential is headed towards 5%.

11-10-21 Final Demand Bldgs and Trades prices for October gained a year’s worth of increase (6.5%) in one month for Oct. This is the largest monthly increase on record back to the start of these series, 2006.

11-16-21 My current forecast for inflation in 2021 is now 6.5% for nonresidential buildings and 14% for residential. I expected to see some increase, just not this much. The PPI reports give the first clues to pass thru costs.

See the most recent inflation comments 2021 Construction Inflation updated 10-15-21

Most years, inflation climbs at a steady rate. 2021 could end up being a year in which inflation is drastically different in one or two quarters vs the entire year.

8-13-21 As expected, many Final Demand prices surged in July by 1.5% to 2%.

10-14-21 Final Demand Trades prices up again since July. Some Buildings increased. Wood products have come way down, but almost every other material product has gone up, metals way up.

PPI INPUTS only Sept 2021

PPI Final Demand only Sept 2021

11-10-21  From Sept to Oct materials price changes were normal, but Final Demand prices jumped what could be considered an entire year’s worth of increase in just one month. We’ve been watching the price pass thru increase slowly, until now. This is the single largest monthly increase in Final Demand pricing that I can remember.

PPI INPUTS only Oct 2021

PPI Final Demand only Oct 2021

Link to AGC page of producer price monthly reports

Producer Price Index Year-to-date June & July 2020

7-14-20 updated 8-28-20

Producer Price Index selected items year-to-date through June 2020. All values compare most recent June pricing to December 2019. Pricing represents 6-month change, not annualized change.

  • -2.5%  Inputs to new nonresidential construction
  • -0.9%  Inputs to new residential construction
  • +1.0%  Final demand construction
  • -0.4%  New Warehouse Bldg
  • +1.2% New School Bldg
  • +0.7% New Office Bldg
  • +1.4% New Industrial Bldg
  • +1.4% New Healthcare Bldg
  • New work on nonresidential buildings
  • +0.7% Concrete contractors
  • +1.8% Roofing contractors
  • +1.4% Electrical contractors
  • +1.2% Plumbing contractors
  • Selected Material Inputs
  • -42.0% #2 Diesel fuel
  • +2.7% Ready Mix Concrete
  • +1.3% Precast concrete products
  • +1.3% Flat Glass
  • +0.1% Gypsum products
  • +6.1% Lumber and Plywood
  • -5.7% Steel pipe and tube
  • -11.5% Aluminum mill shapes
  • +2.2% Fabricated structural metal
  • +10.3% Fabricated structural metal bar joists and reinforcing bars
  • +11.9% Fabricated structural metal for non-industrial buildings
  • -3.7% Fabricated structural metal for bridges
  • -2.2% Fabricated steel plate
  • +1.6% Iron and steel scrap

AGC’s Table of June 2020 PPI

AGC does not publish year-to-date values. The data in this post is the combined effect of comparing June to March and March to December.

Here’s the link to AGC PPI reports for all months

8-28-20 There were some pretty dramatic changes in July in the Producer Price Index selected items year-to-date. Edited here, all values compare most recent JULY pricing to December 2019. Pricing represents 7-month change, not annualized change.

  • -1.0%  Inputs to new nonresidential construction ytd through JULY
  • +1.0%  Inputs to new residential construction ytd through JULY
  • +1.6%  Final demand construction ytd through JULY
  • +1.0%  New Warehouse Bldg
  • +1.8% New School Bldg
  • +1.7% New Office Bldg
  • +2.2% New Industrial Bldg
  • +2.2% New Healthcare Bldg
  • New work on nonresidential buildings ytd through JULY
  • +0.5% Concrete contractors
  • +2.2% Roofing contractors
  • +1.7% Electrical contractors
  • +0.7% Plumbing contractors
  • Selected Material Inputs ytd through JULY
  • -24.0% #2 Diesel fuel
  • +2.8% Ready Mix Concrete
  • +1.3% Precast concrete products
  • +1.2% Flat Glass
  • +0.3% Gypsum products
  • +13.8% Lumber and Plywood
  • -5.5% Steel pipe and tube
  • -10.0% Aluminum mill shapes
  • -1.0% Fabricated structural metal
  • +0.8% Fabricated structural metal bar joists and reinforcing bars
  • +0.4% Fabricated structural metal for non-industrial buildings
  • +1.4% Fabricated structural metal for bridges
  • +2.7% Fabricated steel plate
  • -2.8% Iron and steel scrap

PPI Materials Prices YTD June 2019

Price changes listed here are year-to-date 2019 through June. Change is for 6 months YTD, not annualized. As a reminder, the Producer Price Index (PPI) DOES NOT include imports (imports are not produced in the US) or tariffs. Only pricing for domestically produced materials is included. That would include any decisions domestic producers make influenced by tariffs on imported products.

Prices for years prior can be found PPI Construction Materials Inputs Index

PPI Tables Update to June 2019

Construction PPI Excludes Imports and Tariffs

When assessing or tracking the pricing affect of tariffs on construction materials, you need to understand that the Producer Price Index (PPI) does not include imports (imports are not produced in the US) or tariffs. See items 4 and 24 in the FAQ provided by the Bureau of Labor Statistics. Construction PPI changes reflect pricing decisions domestic producers make on domestic products in reaction to tariffs on imported products. Tariffs have big impact on domestic prices.

BLS explanation of method and definitions

The price change we see in the PPI for construction materials reflects the domestic material prices of ALL other domestically produced materials used in the industry. While tariffs may affect only 10% of products used in the industry the PPI shows us the domestic producers reaction applied to the other 90%.

For example: Steel tariffs of +25% applied only on imported steel, affected only 30% (the imported share) of steel used in US. However the PPI shows us that all other domestically produced steel in the US and used in construction increased in price between 12% and 22% in 2018. Prices of domestic steel have receded somewhat, now ranging from +7% to +13%. But the point is that tariffs caused a price increase also in domestic steel.

AGC Tables of Construction PPI

The cost of ALL DOMESTIC steel mill products (of all types) produced in the US increased 18% in 2018 after the steel tariffs were imposed. That is domestic producers pricing response in reaction to tariffs. Tariffs impacted pricing decisions on all domestically produced products, not just the imported products. The increase has since receded but is still up 10%. Consumers pay the price.

Inflation and Forecasting Presentation Advancing Precon & Estm Conf 5-22-19

This is a PDF of slides (including notes) from my

Construction Inflation & Forecasting Presentation

at Hanson Wade

Advancing Preconstruction & Estimating Conference

 Dallas, TX 5-22-19

Advancing Pre-construction & Estimating conference 2019

Full EdZ Presentation Inflation-Forecasting w notes HW-APE 5-22-19 PDF

PPI Construction Materials Inputs Index

2-20-18 original post

Feb 2019 Tables and Plots updated to end of 2018

Here’s the link to the June 2019 data

Here’s a link to the AGC APRIL 2020 summary report.

Producer Price Index of Materials Inputs to Construction.  The 1st two plots are PPI Final Costs which includes all overhead and profit as sold. All other plots are PPI Input costs. Changes in PPI Input costs at the producer level may not reflect changes in actual pricing to contractors or changes in final cost as installed to building owner. Input Costs do not reflect retail markup or mark down and do not reflect overhead and profit markups that may change according to market activity.

PPI for Construction Inputs IS NOT a direct indicator of construction inflation. It does not represent selling price, the final cost of materials put-in-place which includes cost of labor, overhead and profit.  See below link to description of Ovhd&Profit.

Cautions When Using PPI Inputs to Construction!

PPI Inputs and Inflation not only can vary widely but also may not even move in the same direction. See the above link for a table comparing PPI% vs Inflation%.

PPI Final Bldg 2-20-19

PPI Final Trades 2-20-19

PPI Nonresidential Building Types

PPI Nonresidential Building Construction Sector — Contractors

Specific Building and Contractor PPI Indices are Final Demand or Selling Price indices. They are plotted above.

See this article by the Bureau of Labor Statistics on Nonresidential building construction overhead and profit markups applied to select Nonres building types

Bureau of Labor Statistics Producer Price Index measures PPI cost of materials price at producer level. The PPIs that constitute Table 9 of the BLS PPI Report measure changes in net prices for materials and supplies typically sold to the construction sector, but do not represent the final cost installed. They are known as PPI Inputs. They are plotted below.

PPI Materials and Supply INPUTS to Construction Industries

Here’s a brief summary of some of the PPI statistics tracked here:

  • One year (2018) change
  • biggest increases > Steel Pipe and Tube 21%, Fabricated Steel for Bridges 15%, Ornamental Metals 12%, Fab Structural Steel for Buildings 12%
  • biggest declines > Copper and Brass shapes -6%, Lumber and Plywood -4%
  • PPI Final cost of buildings and Trades up 4% to 6%
  • Final cost of buildings posted largest increases since 2008.
  • Final cost of trades (except for Roofing) posted largest increases since 2009.
  • Steel Products posted largest increases since 2008
  • Lumber and Plywood, which had risen dramatically (+30%) earlier in the year, now down 4% from Dec ’17
  • Two year (2017+2018) changes
  • biggest increases > Diesel fuel 45%, Steel Pipe &Tube 31%, Aluminum Shapes 16%, Fabricated Structural Metal for Buildings 16%, Ornamental metals 16%
  • no declines over a two year period

 

Most stable pricing over last 5 years, these items did not change by more than 5%/yr in any given year during the last 5 years and net the smallest total change for 5 years:  Concrete Brick and Block, Concrete Pipe, Ready-Mix Concrete, Plastic Products, Insulation, Fabricated Steel Plate, Sand/Gravel/Crushed Stone.

 

PPI Inputs to Industries 2-20-19

PPI Materials Brick Block 2-20-19

PPI Materials Cement 2-20-19

PPI Materials Glass Roof 2-20-19

PPI Materials Gyp Wood 2-20-19

PPI Materials Metals 2-20-19

PPI Materials Steel 2-20-19

The Materials Inputs indices plots above are generated by indexing the December to December percent changes in the table below. Data updated to include Dec 2018 published January 2019.

PPI x Materials Percents 2006-2018 2-10-19

PPI xx Trades Final Cost 2006-2018 2-10-19

PPI xx Buildings Final Cost 2006-2018 2-10-19

Each month,  puts out tables and explanation of recent changes in producer price indexes and employment cost indexes for construction materials inputs, and building types and subcontractor final demand cost. Best source available.  Watch this AGC page for monthly updates to the PPI

Here’s the link to the June 2019 data

 

2018 Construction Outlook Articles Index

Articles Detailing 2018 Construction Outlook

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These links point to articles here on this blog that summarize end-of-year data for 2017 and present projections for 2018.

Spend current vs constant 2018 3-4-18

Most Recently Published

July Construction Starts Fall but 3moAvg at New High

Construction Spending June 2018 8-1-18

June Construction Starts Reach New Highs 7-25-18

Construction JOLTS – What’s wrong with this picture? 7-10-18

What Jobs Shortage? 7-6-18

Construction Spending 2016-2017 Revisions 7-1-18

New Construction Starts May 2018 Near All-Time High 6-24-18

Construction Spending April 2018 – 6-1-18

Notes on March 2018 Construction Spending 5-2-18

Construction Activity Notes 4-25-18

2018 Construction Spending Forecast – Nonresidential Bldgs 3-28-18

2018 Construction Spending Forecast – Mar 2018

Construction Economics Brief Notes 3-10-18

Construction Spending is Back 3-9-18

Construction Jobs 3-8-18

Publicly Funded Construction 2-28-18

PPI Materials Input Index 2-20-18

Down the Infrastructure Rabbit Hole 2-16-18

Inflation in Construction 2018 – What Should You Carry? 2-15-18

Residential Construction Jobs Shortages 2-3-18

2018 Construction Spending – Briefs 1-26-18

Cautions When Using PPI Inputs to Construction! 1-15-18

Indicators To Watch For 2018 Construction Spending? 1-10-18

Spending Summary 2018 Construction Forecast Fall 2017 12-3-17

Backlog 2018 Construction Forecast Fall 2017 11-10-17

Starts Trends 2018 Construction Forecast Fall 2017 11-8-17

In What Category is That Construction Cost? 11-15-17

Construction Jobs / Workload Balance 11-7-17

Constant Dollar Construction Growth 11-2-17

Is Infrastructure Construction Spending Near All-Time Lows? 10-10-17

Summary

2018 Construction Spending Forecast – Mar 2018

2018 Construction Spending – Briefs 1-26-18

Spending Summary 2018 Construction Forecast Fall 2017 12-3-17

Construction Spending is Back 3-9-18

2017 Results

2018 Construction Spending Forecast – Mar 2018

Spending Summary 2018 Construction Forecast Fall 2017 12-3-17

2018 Starting Backlog & New Starts

2018 Construction Spending – Briefs 1-24-18

Backlog 2018 Construction Forecast Fall 2017 11-10-17

Starts Trends 2018 Construction Forecast Fall 2017 11-8-17

Construction Starts and Spending Patterns 9-26-17

2018 Spending Forecast

2018 Construction Spending Forecast – Mar 2018

2018 Construction Spending – Briefs 1-26-18

So, About Those Posts “construction spending declines…” 10-4-17

Construction Spending Almost Always Revised UP  5-1-17

Nonresidential Buildings

2018 Construction Spending Forecast – Nonresidential Bldgs 3-28-18

2018 Construction Spending Forecast – Mar 2018

2018 Construction Spending – Briefs 1-24-18

Nonres Bldgs Construction Spending Midyear 2017 Forecast 7-24-17

Residential

2018 Construction Spending Forecast – Mar 2018

Residential Construction Jobs Shortages 2-3-18

Infrastructure Outlook

2018 Construction Spending Forecast – Mar 2018

Down the Infrastructure Rabbit Hole 2-16-18

2018 Construction Spending – Briefs 1-24-18

Is Infrastructure Construction Spending Near All-Time Lows? 10-10-17

Infrastructure – Ramping Up to Add $1 trillion 1-30-17

Calls for Infrastructure Problematic 1-12-17

Public Construction

2018 Construction Spending Forecast – Mar 2018

Publicly Funded Construction 2-28-18

Spending Summary 2018 Construction Forecast Fall 2017 12-3-17

Infrastructure & Public Construction Spending 3-5-17

Materials

PPI Materials Input Index  2-20-18

Jobs

Construction Jobs 3-8-18

Residential Construction Jobs Shortages 2-3-18

Construction Jobs / Workload Balance 11-2-17

Construction Jobs Growing Faster Than Volume 5-5-17

Inflation

Inflation in Construction 2018 – What Should You Carry? 2-15-18

Constant Dollar Construction Growth 11-2-17

Construction Inflation Index Tables UPDATED 2-12-18

Construction Cost Inflation – Commentary  updated 2-13-18

US Historical Construction Cost Indices 1800s to 1957

 

 

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