January Producer Price Indices: Concrete, Asphalt on the Rise

Concrete’s price increased 4.7 percent compared to last year, according to the January Producer Price Indices (PPI). Year-over-year declines in steel (-1.5 percent) and lumber (-0.5 percent) and an uptick in asphalt (1.3 percent) were also reported. Since 2013, steel has maintained a relatively narrow range of price movement. This is likely due to moderated global economic conditions. Asphalt has shown a slight but consistent rise during the same period.

On a month-to-month basis, concrete and lumber were up 0.7 percent and 0.3 percent, respectively. For lumber, the increase came on the heels of three months of consecutive declines. A strong start to the year in terms of the housing market could boost lumber prices as the construction season begins to unfold later in the year. Asphalt’s 0.4 percent decline was the first since the previous July and falls within the three to six month lag period that embodies the correlation between oil price movement and asphalt price. This may indicate the start of a significant drop in asphalt prices during the coming months.