The cost of construction materials was up in July, even as producers eased up on price increases, according to the AGC.

Ken Simonson, chief economist for the Associated General Contractors, recently commented on the Aug. 15 producer price index report from the U.S. Bureau of Labor Statistics.

Simonson said that in July, the producer price index for finished goods slowed to a 0.1 percent increase, seasonally adjusted, down 0.5 percent in June. The price index for materials and components for construction accelerated to a 0.7 percent rise, while the construction materials index rose to 8.3 percent.

"That gap actually understated the impact on nonresidential and multifamily construction," said Simonson. "Single-family building costs have been held down by falling prices for lumber and plywood, but these materials make up an insignificant part of the cost of other types of construction."

He also said that major material price increases over the past 12 months included copper and brass mill shapes, such as pipe, wiring faucets and flashing, up 88 percent.

Wallboard and gypsum products were up 23 percent, while plastic construction products like polyvinyl chloride pipe fitting and membranes were up 20 percent. Steel mill products were up 18 percent and aluminum mill shapes were up 15 percent.

"Owners should not assume inflation is going away," said Simonson. "For many of these materials, cost increases have been accelerating, not subsiding. Others show big increases in prices of the raw materials used to make them."

A broadcast of the latest construction costs is available at www.agc.org/podcast.

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