A wild ride to nowhere best describes recent price trends for lumber. Near the end of last year and during the first few months of 2001, prices hit lows that had not been seen in a decade. Then in May and June, prices shot up with sharp double-digit gains. Just as suddenly, prices collapsed in July and August. In the meantime, these price fluctuations were pulling along several cost indexes, including ENR's Building Cost Index. Lumber prices account for 15% of the BCI but only 9% of ENR's Construction Cost Index. This explains why users of ENR's indexes have seen more volatility in the BCI in recent months than in the CCI. In June, the annual escalation rate for the BCI was 0.5%. That jumped to 2.3% in July before falling back to 1.6% this month. During the same three months, the annual escalation rate for die CCI was 1.3%, 2.9% and 2.7%, respectively.
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