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.
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,” says 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 toABC’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.”
