August 2012 Municipal Cost Index remains flat

Last month, the overall costs of goods and services purchased by local governments remained stable, according to American City & County’s Municipal Cost Index. The August 2012 Municipal Cost Index value of 225.5 is 0 percent lower than last month and only 1.3 percent higher than last year.

Reversing its trend since November 2011, natural gas prices increased 15 percent, showing the greatest price increases in the last month among the items tracked by American City & County. However, natural gas prices remain 44.7 percent lower than last year. Gasoline also increased 1.9 percent in the last month, while crude petroleum decreased 11.7 percent, and diesel fuel (No. 2) decreased by 8.8 percent.

Minor price increases occurred for plywood (1 percent), gypsum products (1.1 percent) and iron ore (1.6 percent) over the last month. Since last year, plywood has increased 14.3 percent, gypsum is up 13.2 percent, and iron ore has increased 24.7 percent.

The Municipal Cost Index, developed exclusively by American City & County, is designed to show the effects of inflation on the cost of providing municipal services. State and local government officials rely on American City & County’s Municipal Cost Index to stay on top of price trends, help control price increases for commodities, make informed government contract decisions and intelligent budget planning. Since 1978, readers have loyally referred to the Municipal Cost Index to determine the cost of inflation and, hence, the rising cost of doing business as a local government.

American City & County’s Municipal Cost Index for August 2012 and a complete archive since 1978 is available now at americancityandcounty.com/municipal-cost-index.