April 2009:Construction Materials Price History & Outlook

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April 2009 Construction Materials Price History and Outlook from Ken Simonson, Chief Economist AGC of America

April 2009 Construction Materials Price History and Outlook from Ken Simonson, Chief Economist AGC of America

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  • 1. Construction Materials Price History and Outlook April 20, 2009 Ken Simonson, Chief Economist AGC of America [email_address]
  • 2. Change in Producer Prices for Construction vs. Consumer Prices, 2003 - 2009 (December 2003 = 100) Source: BLS (CPI, PPI) Mar. 2009
  • 3. Producer Price Indexes, 2007 - 2009 Inputs to construction industries Highway & street construction Nonresidential buildings Other heavy construction 1-month: -0.6% 12-month: -1.9% 1-month: -0.9% 12-month: -7.0% 1-month: -0.8% 12-month: -5.8% 1-month: -0.6% 12-month: -2.6%
  • 4. Producer Price Indexes, 2007 - 2009 No. 2 Diesel Fuel Steel Mill Products Concrete Products Asphalt Paving Mixtures & Blocks 1-month: -8.9% 12-month: -62.5% 1-month: -0.1% 12-month: -14.6% 1-month: -1.9% 12-month: 17.4% 1-month: -0.9% 12-month: 3.6%
  • 5. Producer Price Indexes, 2007 - 2009 Copper & Brass Mill Shapes Aluminum Mill Shapes Lumber and Plywood Gypsum Products 1-month: -0.8% 12-month: -37.0% 1-month: -2.9% 12-month: -22.3% 1-month: 0.0% 12-month: 9.0% 1-month: -2.5% 12-month: -9.6%
  • 6. Outlook for materials in ‘09 compared to ‘08
    • Lower average prices: diesel, asphalt, steel
    • Possible increases: concrete, gypsum, copper, wood products
    • Year-over-year PPI change: -4% to 0%
    Source: Author’s forecasts
  • 7. Outlook for materials (beyond 2009)
    • Industry depends on specific materials that:
      • are in demand worldwide
      • have erratic supply growth
      • are heavy, bulky or hard to transport
    • Construction requires physical delivery
    • Thus, industry is subject to price spurts, transport bottlenecks, fuel price swings
    • Expect 6 to 8% PPI increases, higher spikes
    Source: Author’s forecast
  • 8. AGC economic resources (sign up by email to simonsonk@agc.org)
    • The Data DIGest: weekly one-page email
    • PPI tables: emailed monthly
    • State-specific stimulus estimates and fact sheets: www.agc.org/stimulus
    • Webinars/audioconferences
    • Member emails on stimulus jobs, credit market
  • 9. Ken Simonson Chief Economist Associated General Contractors of America simonsonk@agc.org, 703-837-5313 www.agc.org