Overall construction input prices rose 0.7% in February, slightly lower than the rate set in January, according to an Associated Builders and Contractors (ABC) analysis of Bureau of Labor Statistics data. Compared to February 2017, prices are up 5.2%. Nonresidential construction materials prices are also up 0.4% on a monthly basis and 4.9% compared to the same time last year.
Prices for all 11 subcategories increased year over year, and only three saw monthly declines. Crude petroleum saw the largest drop in price, falling 7.3% for the month, though it is up 16.6% on a year-over-year basis. Prices were also down for prepared asphalt, tar roofing and siding products (-4.9%) and nonferrous wire and cable (-2.6%). The largest monthly increase was in natural gas, which rose 23.5% in February. The rise in natural gas and drop in crude petroleum is a reversal of what was seen in January’s data.
“For the last several months, construction firms have become increasingly concerned about rising construction materials prices,” said ABC Chief Economist Anirban Basu. “Today’s data show those concerns are warranted. A confluence of factors will likely continue to push materials prices higher in the months to come. These factors include global monetary policy, which continues to help accelerate growth in much of the world, a strong U.S. construction market and a policymaking environment that has impacted the price of softwood lumber, steel and aluminum.
“Recently enacted tariffs are making headlines, but steel prices were already rising rapidly,” said Basu. “Based on today’s report, iron and steel prices rose 7.1% from February 2017 to February 2018. The price of steel mill products was up 4.8%, while the price of softwood lumber was up 15.6%.
“On top of materials price increases are, of course, expanding human capital shortfalls and rising compensation costs,” said Basu. “These factors have likely moderated near-term confidence among construction firms regarding profit margin growth in the midst of a healthy economy.”
Related Stories
Market Data | Jul 17, 2019
Design services demand stalled in June
Project inquiry gains hit a 10-year low.
Market Data | Jul 16, 2019
ABC’s Construction Backlog Indicator increases modestly in May
The Construction Backlog Indicator expanded to 8.9 months in May 2019.
K-12 Schools | Jul 15, 2019
Summer assignments: 2019 K-12 school construction costs
Using RSMeans data from Gordian, here are the most recent costs per square foot for K-12 school buildings in 10 cities across the U.S.
Market Data | Jul 12, 2019
Construction input prices plummet in June
This is the first time in nearly three years that input prices have fallen on a year-over-year basis.
Market Data | Jul 1, 2019
Nonresidential construction spending slips modestly in May
Among the 16 nonresidential construction spending categories tracked by the Census Bureau, five experienced increases in monthly spending.
Market Data | Jul 1, 2019
Almost 60% of the U.S. construction project pipeline value is concentrated in 10 major states
With a total of 1,302 projects worth $524.6 billion, California has both the largest number and value of projects in the U.S. construction project pipeline.
Market Data | Jun 21, 2019
Architecture billings remain flat
AIA’s Architecture Billings Index (ABI) score for May showed a small increase in design services at 50.2.
Market Data | Jun 19, 2019
Number of U.S. architects continues to rise
New data from NCARB reveals that the number of architects continues to increase.
Market Data | Jun 12, 2019
Construction input prices see slight increase in May
Among the 11 subcategories, six saw prices fall last month, with the largest decreases in natural gas.
Market Data | Jun 3, 2019
Nonresidential construction spending up 6.4% year over year in April
Among the 16 sectors tracked by the U.S. Census Bureau, nine experienced an increase in monthly spending, led by water supply and highway and street.
