ABC: Construction Input Prices Dip in September
Construction input prices decreased 0.9% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data.
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“The decline in construction input costs observed in September was almost entirely due to a large decrease in oil prices,” said Anirban Basu, ABC chief economist. “Certain materials, like gypsum, fabricated structural-metal products, asphalt and lumber exhibited sizable price increases for the month. While domestic freight rates are low by historical standards, elevated global container-shipping rates and emerging supply chain issues could put upward pressure on materials prices in the coming months.”
Per the review, nonresidential construction input prices also decreased 0.9% for the month.
Prices decreased in two of the three energy subcategories last month.
Crude petroleum prices were down by 16.7%, while unprocessed energy materials prices were down 12.6%. Natural gas prices rose 2.4% in September. Overall construction input prices are 1.9% lower than a year ago, while nonresidential construction input prices are 2.1% lower.
“This represents a cause for concern for contractors, many of whom expect their profit margins to contract over the next six months,” Basu said, citing ABC’s Construction Confidence Index.
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