Construction Materials PPI

"Construction materials costs are rising faster than producer price reports suggest," said Ken Simonson, Chief Economist for The Associated General Contractors of America (AGC). "Steel is getting especially hot and diesel is adding fuel to the inflation fire." Simonson was commenting on the latest producer price index (PPI) report from the Bureau of Labor Statistics. "This year, as in 2004, price hikes for other materials, such as diesel fuel and asphalt, are going to hit construction especially hard," he said. The retail price of diesel fuel soared 21 cents a gallon in the month since the PPI data was collected, according to weekly surveys by the Energy Information Administration. "Asphalt prices, which jumped 14 percent at the refinery level last month, will soon rise for paving and roofing contractors," Simonson predicted. "Paving asphalt also uses a lot of aggregate, or crushed stone. That PPI jumped 1.9 percent in February and 3.9 percent in the past three months. Road construction will bear the brunt of these increases, because highway and bridge contractors use so much diesel, asphalt, steel for bridges and guardrails, and concrete, which also is rising in price." Your comment?