WASHINGTON—Construction input prices increased 1.2% in August compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices also increased 1.2% for the month.
Overall construction input prices are 8.9% higher than one year ago, while nonresidential construction input prices are 8.8% higher. Prices increased in 2 of the 3 energy subcategories last month. Crude petroleum prices expanded 5.2% and unprocessed energy materials prices rose 1.5%, while natural gas prices were down 11.6% in August.
“Construction input prices surged again in August, and the increases were widespread across materials,” said ABC Chief Economist Anirban Basu. “Prices for iron and steel, softwood lumber, switchgear, copper wire and cable, and several derivative metal products are now up more than 10% year over year. While contractors remain optimistic about their margins, according to ABC’s Construction Confidence Index, ongoing input price escalation is likely to weigh on profitability over the next several months. This is especially true given recent escalation in the trade war with Canada and the fact that oil prices have jumped back above $100 per barrel.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.
Associated Builders and Contractors is a national construction industry trade association established in 1950 with 67 chapters and 24,000 members. Founded on the merit shop philosophy, ABC helps members offer a robust employee value proposition, develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org
