Data Digest is re-printed with permission.

Vol. 23, No. 6 February 13-17, 2023

Input costs vary widely in January; paving price hikes loom; housing starts retreat, permits are mixed

     Contractors’ input costs diverged widely in January, as one-month or year-over-year (y/y) increases in fuel, paving materials, gypsum, and paint costs outweighed lower prices for lumber and steel, according to Bureau of Labor Statistics (BLS) data posted on Thursday. The producer price index (PPI) for material and service inputs to new nonresidential construction rose 0.9%, the largest monthly gain since May 2022. But the 4.3% y/y rise was the smallest in more than two years. The increases were driven in part by the PPI for diesel fuel, which jumped 7.1% for the month and 22.8% over 12 months. Other notable increases include the indexes for asphalt paving mixtures and blocks, up 7.9% and 14.7%, respectively; concrete products, up 1.8% and 14.8%; brick and structural clay tile, 0.7% and 12.9%; gypsum building materials such as wallboard, 0 and 11.1%; and architectural coatings such as paint, 0 and 15.8%. There were large y/y decreases in PPIs for lumber and plywood, unchanged for the month but down 30.8% y/y, and steel mill products, -2.3% and -30.1%, respectively. The PPI for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—rose 1.7% month and 17.3% y/y. PPIs for new, repair, and maintenance work by subcontractors also varied greatly. The monthly and y/y change in the indexes for roofing contractors (5.5% and 22.9%, respectively) and electrical contractors (7.2% and 19%) were the largest since the series began in December 2007. The PPI for plumbing contractors rose 0.8% and 13.4% but the index for concrete contractors declined 0.8% in January and increased 8.4% over 12 months. AGC posted tables of construction PPIs. BLS made routine annual adjustments to the relative weights of inputs; email to receive a copy.

     Further price increases for paving materials may be in the offing. Following Martin Marietta Materials (MLM)’s fourth-quarter conference call, investment analyst Thompson Research Group reported on Thursday, “2023 guide on [aggregates] pricing is for 13-15% off of strong carryover and January 1 price increases. Keep in mind, this does not include a mid-year price increase, which MLM has already communicated to its customers is a possibility….MLM is starting off 2023 strong with a January 1 [cement] price increase of $20/ton, and while not providing full-year pricing guidance would expect solid y/y realization of carryover pricing and the January 1 increase.” Readers are invited to send pricing and supply-chain information to

     Housing starts (units) in January declined 4.3% at a seasonally adjusted annual rate from the December rate and 21% y/y, the Census Bureau reported on Thursday. Single-family starts decreased 4.3% for the month 27% y/y. Multifamily (five or more units) starts slid 5.4% and 8.4%, respectively. Residential permits inched up 0.1% for the month but tumbled 27% y/y. Single-family permits declined for the 11th month in a row, by 1.8% from December and 40% y/y. Multifamily permits rose 0.5% for the month but slipped 4.1% y/y. There were 932,000 multifamily units under construction in January, the most in series history dating to 1970. The figure was the 18th-straight monthly increase, up 0.6% for the month and 24% y/y. However, the y/y decreases in starts and permits suggests multifamily construction is likely to decline once current projects wrap up.

     The number of multifamily building permits increased 9.9% from 2021 to 2022, as “35 states and the District of Columbia recorded growth, while 15 states recorded a decline,” the National Association of Home Builders (NAHB) posted on Tuesday. “Georgia led the way with a sharp rise (130.2%) in multifamily permits…while Pennsylvania had the largest decline of 71.0%.” Among metro areas, the largest number of multifamily permits were issued in the New York-Newark-Jersey City, N.Y.-N.J.-Pa. combined area (up 3% from 2021), followed by Dallas-Fort Worth-Arlington (up 26%), Houston-The Woodlands-Sugar Land (up 69%), Austin-Round Rock (down 14%), and Los Angeles-Long Beach-Anaheim (up 9%).

     The share of foreign-born workers in construction in 2021 “stayed at 24% of the construction workforce, slightly below the 2016 record high share of 24.4% but on a par with the 2019 pre-pandemic reading,” according to an analysis of Census’s 2021 American Community Survey that NAHB posted on Wednesday. “The share of immigrants remained higher in construction trades, reaching 30%. The annual flow of new immigrant workers into construction slowed to the lowest levels since 2012 despite ongoing skilled labor shortages.”

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Editor:, Chief Economist, AGC. Go here for Ken’s PPT or more construction data.
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