ARLINGTON, VA - Lumber and plywood prices, up 6.7 percent since last year, softened recently, falling 0.9 percent in October and 4.5 percent since July, says the Associated General Contractors of America, a contractor and construction trade group. Lumber and plywood are relative bright spots, as construction contractors generally find themselves squeezed between rising prices for construction materials and flat prices for what they can charge their clients, says AGC economist Ken Simonson.

"The construction industry has to pay more for key materials while charging the same for finished projects,” says Simonson. "This squeeze is likely to force firms to shut their doors, compounding the already staggering 17.3 percent unemployment rate for the sector.”An October Producer Price Index released by AGC shows prices for materials used in construction jumped 0.6 percent in October and 4.8 percent over the past 12 months; the price index for finished buildings remained flat. The figures are drawn from the Bureau of Labor Statistics Overall the BLS producer price index rose 0.4 percent in October.

Prices for lumber and plywood declined 0.9 percent in October; while such wood products are 6.7 percent more expensive than they were 12 months ago, they are 10 percent less expensive than they were in December 2003. In October the price of diesel fuel rose 7.2 percent; copper and brass mill shapes are up 5.4 percent for the month; steel mill products are up 1.4 percent since September and 12 percent over the past 12 months.