Lumber Prices Decline While Others Climb

The Labor Department’s construction materials composite price index fell by 0.8% between August and September, the second straight month of decline following three consecutive months of increase. The September 1999 composite index was only 1.1% higher than in September 1998.

Average lumber prices declined 2.9% between August and September following an even steeper 4.4% decline the month before. Average prices this September were 8.3% higher than during the same month last year. For all of 1998, lumber prices averaged 7.7% less than during 1997; we expect that prices will be up 5%-6% over last year’s average by the time final prices are tallied for 1999.

Gypsum product price inflation declined 0.8% between August and September, the second drop in the past three months. Still, average gypsum product prices were 17.8% higher this September than during September 1998. With new capacity coming on board between now and the end of the year we expect that prices will continue to stabilize and that the full-year1999 price gain for gypsum products to be only about half of the September-to-September rise.

Prices for other categories of construction materials were little changed between August and September. After rising a sharp 0.9% the month before, structural steel product prices increased a scant 0.1% during September. Ready-mixed concrete recorded a moderate 0.3% price rise between August and September, following a decline in the month before and leaving average prices just 1.8% above last September’s level. Ceramic floor and wall tile prices have risen even less--just 0.4%--over the past twelve months. Roofing material price increases, on the other hand, have accelerated in recent months. August’s sharp 0.9% price increase was followed by a 0.5% price rise this September. It’s clear that higher oil prices have contributed to the upward movement in roofing prices during this summer and early fall, although average prices this September were still slightly below their level of September 1998.

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