Oct. 23, 2006: Producer Prices Drop in September but Still Threaten Construction
"Plunging petroleum prices drove down the overall producer price index and moderated the increase in the PPI for construction materials and components," Simonson said. "The PPI for finished goods plunged 1.1 percent for the month, before seasonal adjustment, and was up only 0.9 percent compared to September 2005. But the PPI for construction materials and components rose 0.3 percent, the same as in August, and had a year-over-year increase of 8.1 percent, nine times as much as the overall index.
"The 12-month increase for most construction inputs was milder than in the August report but still hard for contractors to either absorb or pass on," Simonson observed. "For instance, the PPI for copper and brass mill shapes soared 75 percent from September 2005 to September 2006. Other large gains included asphalt paving mixtures and blocks, 33 percent; steel mill products, 23 percent; gypsum and plastic construction products, 19 percent each; aluminum mill shapes, 14 percent; and concrete products, 9.3 percent.