Building Materials Prices Increase in January Reversing Four-Month Trend


By David Logan on February 16, 2023 • After four consecutive declines, the producer price index (PPI) for inputs to residential construction less energy (i.e. building materials) rose 0.9% in January 2023 (not seasonally adjusted) according to the latest PPI report. Price growth of goods inputs to residential construction, including energy, gained 1.4% over the month. Prices have increased 5.1% over the past 12 months. Ready-Mix Concrete The trend of ready-mix concrete (RMC) prices continued its historic pace as the index increased 0.9% in January after surging 13.6% in 2022.  RMC prices have increase in all but two months since January 2021. Gypsum Building Materials The PPI for gypsum building materials was unchanged in January, following a 0.2% decline in December 2022. Gypsum products prices are 11.1% higher than they were a year ago but began stabilizing in August 2022. In the five months since, prices have been essentially unchanged. Softwood Lumber The PPI for softwood lumber (seasonally adjusted) fell 7.6%–the sixth straight monthly decline. Over that period, the index has decreased 23.3%. Steel Mill Products Steel mill products prices decreased 2.3% in January after falling 3.3% in December 2022. Although the pace of declines has slowed, prices have dropped 27.8% since May 2022 and are down 30.1% over the past 12 months. Related ‹ Single-Family Built-for-Rent Growth Strong in 2022Tags: construction costs, Gypsum, inflation, lumber, ppi, producer price index, producer prices, ready-mix concrete, softwood lumber, steel

Building Materials Prices Increase in January Reversing Four-Month Trend2023-02-16T18:16:47-06:00

OMB Proposes Standards on Building Materials Made in America


The Office of Management and Budget (OMB) has proposed new standards to determine if construction materials for federally funded infrastructure projects are made in the USA.  The new guidance, required by the Infrastructure Investment and Jobs Act—also known as the Bipartisan Infrastructure Law (BIL)—“sets standards to carry out the statutory requirement that all manufacturing processes for construction material occur in the United States.” Federally funded infrastructure projects include housing development that receives any federal support such as through the CDBG and HOME programs. Covered Construction Materials and Manufacturing Standards The Build America, Buy America Act (BABA)—part of the BIL—requires that OMB issue standards that define ‘‘all manufacturing processes’’ in the case of construction materials. Initial guidance (memorandum M–22–11) issued in April 2022 fell short of this and instead provided non-binding guidance on the definition of construction materials. The latest proposal includes an expanded list of products considered construction materials and proposes standards for ‘‘all manufacturing processes’’ for the manufacture of construction materials. Among construction materials covered by the guidance are lumber, drywall, glass, and plastics. The guidance includes domestic manufacturing process standards for the following construction materials. Defining Infrastructure According to OMB, infrastructure includes roads, highways, and bridges; water systems, including drinking water and wastewater systems; electrical transmission facilities and systems; utilities; broadband infrastructure; and buildings and real property. OMB instructs Federal awarding agencies to interpret the term ‘‘infrastructure’’ broadly and consider the description provided in paragraph (c) of this section as illustrative and not exhaustive. However, OMB then directs agencies to consider certain criteria when determining if a particular project constitutes ‘‘infrastructure.’’ These include whether the project will serve a public function, including whether the project is publicly owned and operated, privately operated on behalf of the public, or is a place of public accommodation, as opposed to a project that is privately owned and not open to the public. Waivers and Exemptions A Federal awarding agency may issue a waiver to the application of the Buy America Preference. The agency notes three types of waivers: Public Interest Waiver: May be applied if the Buy America Preference would be inconsistent with the public interest. Nonavailability Waiver: May be applied if types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality Unreasonable Cost Waiver: May be applied if the inclusion of iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent Before issuing a waiver, the Federal awarding agency must receive a written request from a non-Federal entity to waive the application of the Buy America Preference. The awarding agency must then “prepare a detailed written explanation,” make the waiver and explanation publicly available, allow a minimum 15-day public comment period, and then submit to OMB for final review. The guidance exempts awards expenditures for financial assistance made in anticipation of or response to an event or events that qualify as an ‘‘emergency’’ or ‘‘major disaster.” Public Comment Period OMB has provided only 30 days to comment on the new standard.  NAHB will submit comments as we believe that, under OMB’s proposal as written, virtually all housing development could be excluded from the standard. We have strongly urged HUD to exempt single-family and multifamily affordable housing projects from BABA mandates. However, NAHB remains concerned that the “built in America” standards may stall road and utility projects funded by CDBG or HOME that are needed to allow housing development to take place. Related ‹ Housing Affordability Hits Record Low but Turning Point Lies AheadTags: baba, bipartisan infrastructure law, brass, build america buy america, Building Materials, cement, concrete, copper, drywall, fiber optic cable, glass, inflation, infrastructure investment and jobs act, iron, lumber, materials shortage, millwork, nickel, producer prices, pvc, shortage, softwood lumber, steel, tin, windows

OMB Proposes Standards on Building Materials Made in America2023-02-10T12:23:37-06:00

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