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Building Materials Cost Increases Likely To Remain Moderate.



Overall inflation increased at a faster rate through May, but growth in multifamily housing construction costs moderated. Producer prices for all finished goods, a broad measure of inflation, rose at an annual rate of 4.7 percent from January January: see month.  through May. Last year they rose 1.8 percent.

Inflation in multifamily construction over the same period moderated to a 1.4 percent annual rate of increase in the U.S. Department of Labor's price index over the first five months of this year. The index rose 2.2 percent last year.

Sharp increases in oil and natural gas prices were the major factor in the faster rates of increase in overall inflation. Moderation in the rate of increase in multifamily construction costs may have been partly caused by the labor component since materials and component costs increased at a higher rate than last year.

Materials and components costs for construction rose 2.1 percent over the first five months of this year, versus a 1.4 percent increase in 1999,

Average costs of construction materials alone have risen 2.7 percent this year, versus one percent a year ago.

Oil prices increases also helped produce higher building materials Building materials used in the construction industry to create .

These categories of materials and products are used by and construction project managers to specify the materials and methods used for .
 prices. Price increases in building materials this year are the highest in three petroleum based products - plastic plumbing plumbing, piping systems inside buildings for water supply and sewage. The Romans had a highly developed plumbing system; water was brought to Rome by aqueducts and distributed to homes in lead pipes—hence the name plumbing from the Latin word plumbum  products up 24.6 percent, prepared asphalt asphalt (ăs`fôlt, –fălt), brownish-black substance used commonly in road making, roofing, and waterproofing. Chemically, it is a natural mixture of hydrocarbons.  roofing 11.5 percent and plastic construction products up 8.4 percent annually. Prepared paint has a significant component of petroleum-based products, and their prices rose 5.3 percent.

Two cement/concrete categories of the construction materials sector have experienced above average price increases this year. Construction gravel gravel, particles of rock, i.e., stones and pebbles, usually round in form and intermediate in size between sand grains and boulders. Gravel is composed of various kinds of rock, the most common constituent being the mineral quartz.  and crushed stone prices rose at 8.2 percent and concrete products rose 5.4 percent.

Portland cement portland cement

Binding agent of present-day concrete. It is a finely ground powder made by burning and grinding a limestone mixed with clay or shale. Its inventor, Joseph Aspdin (1799–1855), patented the process in 1824, naming the material for its resemblance to the
 prices over the same period declined slightly. Demand for all of these products has been strong for several years. Increased highway construction has been a major factor in demand for cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder.  and concrete products.

During the last two years, demand has intensified in·ten·si·fy  
v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies

v.tr.
1. To make intense or more intense:
 as office building construction revived re·vive  
v. re·vived, re·viv·ing, re·vives

v.tr.
1. To bring back to life or consciousness; resuscitate.

2. To impart new health, vigor, or spirit to.

3.
 markedly. Demand is so strong that cement shipments to final customers has set records for the past two years.

Shipments rose seven percent in each of the last two years and have been growing at rates of more than five percent annually since 1992. The supply situation would be worse if imports had not more than doubled since 1996. Imports accounted for more than 20 percent of shipments last year. Demand for cement and concrete products is likely to remain strong given the increased federal funds Federal Funds

Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements.

Notes:
These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve
 available for highway construction and the general economic health of state and local governments. Significant price increases in cement, concrete products, and construction gravel and crushed stone could last well into next year, even if residential construction slows.

Softwood softwood

Timber obtained from coniferous trees (mainly of the pine and fir families). With the exception of bald cypress, tamarack, and larch, softwood trees are evergreens.
 lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to  and plywood plywood, manufactured board composed of an odd number of thin sheets of wood glued together under pressure with grains of the successive layers at right angles. Laminated wood differs from plywood in that the grains of its sheets are parallel.  are on the other end of the price change scale. Prices of softwood lumber dropped 6.5 percent in actual terms, 14.9 percent annually, from December-May. Plywood prices declined 3.9 percent and 9.2 percent annually.

Softwood lumber and plywood prices are subject to wide swings over short periods.

Lumber prices declined throughout 1998 and into early 1999 as a result of the Asian crises that dampened demand. The strong domestic construction markets overcame the effects of Asian economies and prices began to rise. There was also an expectation that the Asian economies would begin to recover strongly, but this did not occur.

Recently rising interest rates have impacted the lumber markets with the expectation that they will reduce construction and the demand for lumber. The expected softening softening /sof·ten·ing/ (sof´en-ing) malacia.

softening

a change of consistency, with loss of firmness or hardness.
 in housing starts will lead to further easing in lumber and plywood prices.

Gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms.  product prices dropped 5.4 percent and 12.5 percent annually from December-May. This decline is more of a pause than the result of demand or supply factors.

Gypsum prices rose 17 percent last year, have more than doubled since 1991 and are highly cyclical cyclical

Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements.
. Prices of gypsum products dropped by more than 35 percent from the peak of the last construction cycle in 1986 to the trough Trough

The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion.
 in 1991. A moderation in housing starts will produce further declines in gypsum product prices.

There is growing evidence that the U.S. economy is slowing from the tighter monetary policy that has produced higher mortgage interest rates. The long expected softening in housing starts should be seen soon. Pressure on building material prices in turn will moderate.

Price trends in building materials are not monolithic Single object. Self contained. One unit.  and the trends will vary as the economy slows. Materials closer to commodities, such as lumber, will see their prices moderate sooner and in a more pronounced manner.

Price trends in products higher up the manufacturing chain, such as major appliances A major appliance is usually defined as a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, food preservation, or cleaning, whether in a household, institutional, commercial or industrial setting. , show more modest cyclical change and tend to occur with longer lags than changes in construction activity.

Percent Change Producer Price Indexes Selected Building Materials 1 2/99 to 05/00
                                 1990      1991      1992      1993
Producer Prices Finished
 Goods                           4.9%      2.1%      1.2%      1.2%
Multi-unit Residential           1.8%      1.4%      2.6%      5.0%
All Construction Materials       0.1%      0.7%      1.7%      5.0%
Materials & Components for
 Const.                          1.2%      1.3%      1.6%      4.3%
Plastic Plumbing Products       -8.6%     -6.5%     -7.7%      8.3%
Prepared Asphalt Roofing         0.1%      0.5%     -2.0%      0.6%
Plastic Construction
 Products                       -2.5%     -1.7%     -2.1%      3.5%
Construction gravel &
 crushed stone                   2.1%      2.6%      1.6%      2.6%
General Millwork                 2.2%      4.6%      5.9%      8.3%
Flat Glass                      -0.6%     -1.5%      0.6%      0.8%
Concrete Products                2.1%      2.7%      0.5%      2.6%
Prepared Paint                   4.4%      4.1%      1.3%      1.2%
Hardwood Lumber                  2.2%      1.9%      9.5%     16.1%
Wood Kitchen Cabinets            1.3%      2.9%      3.2%      4.6%
Heating Equipment                5.2%      1.9%      2.4%      2.3%
Residential Light Fixtures       4.6%      0.8%      1.4%      1.0%
Lighting Fixtures                3.7%      1.1%      1.2%      1.9%
Construction machinery &
 Equipment                       3.8%      3.0%      2.8%      2.6%
Wood Doors Interior &
 Exterior                        1.5%      2.8%      3.9%     11.0%
Builders Hardware                4.1%      3.8%      2.4%      2.5%
Hard Surface Floor
 coverings                       2.4%      4.7%      2.0%      2.3%
Portland Cement                  1.6%      3.0%     -0.5%      5.1%
Major Appliances                 1.6%     -0.4%     -0.1%      1.3%
Roof Trusses                    -0.2%     -0.3%      7.9%     17.1%
Power Driven Hand Tools          0.2%      2.8%      2.2%      1.8%
Ceramic Tile                     1.8%     -1.1%      1.1%      0.7%
Insulation Materials             1.6%      2.2%     -7.7%      3.4%
Electronic Computers &
 Equipment                        NA        NA      17.7%    -15.0%
Softwood Plywood                -3.7%      1.0%     21.9%     15.3%
Gypsum Products                 -4.4%     -5.6%      0.6%      8.4%
Softwood Lumber                 -2.6%      1.5%     18.2%     29.9%

                                 1994      1995      1996      1997
Producer Prices Finished
 Goods                           0.6%      1.9%      2.7%      0.4%
Multi-unit Residential           3.4%      3.2%      1.2%      2.2%
All Construction Materials       4.0%      3.7%      0.6%      1.8%
Materials & Components for
 Const.                          3.5%      4.0%      1.1%      2.0%
Plastic Plumbing Products        9.1%      8.2%     -5.2%     -0.8%
Prepared Asphalt Roofing        -2.1%      5.3%     -0.4%     -0.9%
Plastic Construction
 Products                        5.4%      8.9%     -2.2%     -2.1%
Construction gravel &
 crushed stone                   2.9%      3.2%      2.3%      1.8%
General Millwork                 3.2%      1.1%      1.5%      1.9%
Flat Glass                       3.0%      2.4%     -2.8%      1.5%
Concrete Products                3.7%      3.9%      2.9%      2.1%
Prepared Paint                   1.6%      5.2%      3.4%      3.3%
Hardwood Lumber                  3.1%     -0.8%     -1.9%      6.2%
Wood Kitchen Cabinets            4.1%      4.1%      2.7%      2.3%
Heating Equipment                1.5%      3.5%      2.5%      0.8%
Residential Light Fixtures       1.2%      2.7%      0.8%     -0.6%
Lighting Fixtures                0.6%      2.3%      0.9%      0.1%
Construction machinery &
 Equipment                       1.3%      2.2%      2.3%      1.7%
Wood Doors Interior &
 Exterior                        7.4%      1.4%      0.5%      0.8%
Builders Hardware                2.1%      3.6%      2.1%      1.2%
Hard Surface Floor
 coverings                       1.6%      3.9%      0.4%      0.3%
Portland Cement                  7.0%      7.2%      4.6%      4.0%
Major Appliances                -0.1%      0.3%     -0.5%     -2.4%
Roof Trusses                     8.1%     -4.2%      3.5%      7.4%
Power Driven Hand Tools          2.6%      1.7%      1.4%      0.8%
Ceramic Tile                     1.5%      1.8%      0.2%      0.1%
Insulation Materials             5.9%      6.1%      0.1%     -1.0%
Electronic Computers &
 Equipment                      -8.4%     -8.3%    -12.9%    -13.9%
Softwood Plywood                 4.1%      6.5%     -7.7%      1.0%
Gypsum Products                 25.7%     13.5%     -0.3%     10.9%
Softwood Lumber                  2.6%     -9.9%      6.2%      9.0%

                                 1998      1999     05/00      Ann.
                                                               Rate
Producer Prices Finished
 Goods                          -0.8%      1.8%      1.9%      4.7%
Multi-unit Residential           0.1%      2.2%      0.6%      1.4%
All Construction Materials      -0.5%      1.0%      1.1%      2.7%
Materials & Components for
 Const.                          0.2%      1.4%      0.9%      2.1%
Plastic Plumbing Products       -4.2%      4.9%      9.6%     24.6%
Prepared Asphalt Roofing        -0.8%     -0.5%      4.6%     11.5%
Plastic Construction
 Products                       -1.6%      1.4%      3.4%      8.4%
Construction gravel &
 crushed stone                   3.1%      2.9%      3.3%      8.2%
General Millwork                 0.2%      1.9%      3.2%      7.9%
Flat Glass                      -1.2%     -0.7%      2.8%      6.9%
Concrete Products                2.9%      2.6%      2.2%      5.4%
Prepared Paint                   1.8%      1.6%      2.2%      5.3%
Hardwood Lumber                  2.6%     -0.8%      2.1%      5.1%
Wood Kitchen Cabinets            1.9%      1.8%      1.4%      3.4%
Heating Equipment                0.5%      0.5%      1.0%      2.5%
Residential Light Fixtures      -0.3%     -1.1%      0.8%      2.0%
Lighting Fixtures                0.8%      0.6%      0.8%      2.0%
Construction machinery &
 Equipment                       2.1%      1.4%      0.7%      1.6%
Wood Doors Interior &
 Exterior                       -0.1%      2.4%      0.7%      1.6%
Builders Hardware                1.5%      0.7%      0.5%      1.2%
Hard Surface Floor
 coverings                      -0.2%     -0.6%      0.3%      0.6%
Portland Cement                  4.5%      3.4%     -0.2%     -0.5%
Major Appliances                -1.6%     -0.7%     -0.4%     -0.9%
Roof Trusses                    -3.9%      3.5%     -0.4%     -1.0%
Power Driven Hand Tools          1.4%      0.7%     -0.7%     -1.7%
Ceramic Tile                    -3.0%      0.4%     -1.3%     -3.2%
Insulation Materials             1.7%     10.0%     -2.2%     -5.2%
Electronic Computers &
 Equipment                     -16.6%    -13.6%     -3.6%     -8.3%
Softwood Plywood                -0.3%     18.4%     -3.9%     -9.2%
Gypsum Products                  4.0%     17.1%     -5.4%    -12.5%
Softwood Lumber                -11.5%      7.3%     -6.5%    -14.9%



Robert Robert, Henry Martyn 1837-1923.

American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876).

Noun 1.
 J. Sheehan People whose surname is or was Sheehan include:
  • Billy Sheehan, an American rock bassist
  • Bobby Sheehan, an American rock bassist
  • Casey Sheehan, an American soldier
  • Cindy Sheehan, an anti-war activist
  • Fran Sheehan, an American rock bassist
 Mr. Sheehan is president of Regis (REmote Graphics InStruction) A graphics language from Digital used on graphics terminals and first introduced on the PDP-11.  J. Sheehan Data and Forecasting Service in McLean McLean, city (1990 pop. 38,168), Fairfax co., N Va., a suburb of Washington, D.C. Manufacturing includes foods, satellite components, and computer and telecommunications equipment. , Va., and serves as NAA's consulting economist This article is about the profession. For the news publication, see The Economist.

An economist is an expert in the social science of economics.[1]
.
COPYRIGHT 2000 National Apartment Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:SHEEHAN, ROBERT J.
Publication:Units
Date:Jul 1, 2000
Words:1840
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