According to recent data released by Reed Construction Data, prices for construction materials showed a slight increase for the month of August. Nonresidential construction materials prices spiked 0.5% in August after dropping 0.1% the previous month. This jump in prices was caused mainly by higher metal prices (especially copper), and higher energy and energy related products. Not all materials prices followed this trend, however, as cement and natural gas showed a drop in price for August.
Residential construction materials also saw an increase in prices for the month of August, jumping 0.3% after dropping 0.1% in July. The rise in prices for lumber and insulation would have created a larger spike had it not been for the drop in price for oriented strand board (OSB) and gypsum.
Reed Construction Data predicts activity in nonresidential construction to slowly recover, moving at a modest pace during the first half of 2014 and gaining strength throughout the remainder of 2014 and into 2015. This, of course, is assuming Congress is able to settle on raising the debt ceiling long term. Nonresidential construction materials prices are likely to follow the same trend, rising at a moderate rate throughout the remainder of the year and then accelerating in 2014 and 2015.
To read the complete Reed Construction Data report, please click here.