Construction input prices increased 0.1 percent in August compared to July, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.2 percent for August.
Prices decreased in all three energy subcategories in August. Natural gas prices fell by 29.8 percent, while unprocessed energy materials and crude petroleum prices declined by 7.5 percent and 4.2 percent, respectively. Overall construction input prices are 0.7 percent lower than a year ago, while nonresidential construction input prices are down by 0.9 percent.
Anirban Basu, chief economist at ABC, says, “Construction input prices are now down almost a full percentage point over the past year. This is a welcome development for contractors, a plurality of whom now expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index. Moderating materials price escalation, along with easing labor constraints and the near certainty that the Federal Reserve will begin lowering interest rates at its next meeting, should provide some relief to contractors over the next several months.”
