Construction input prices increased 0.9% in April on a monthly basis and 2.4% compared to the same time last year, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data released today. Nonresidential input prices rose 0.9% compared to March and are up 2.8% on an annual basis.
Among the 11 sub-categories, seven experienced price decreases last month, with the largest decreases in natural gas (-8.7%), iron and steel (-1.7%), and steel mill products (-1.7%). The four sub-categories that experienced monthly price increases were crude petroleum (+13.9%), unprocessed energy materials (+3.7%), prepared asphalt products (+2.7%) and concrete products (+1.1%). Year over year, prepared asphalt products (+7.5%), steel mill products (+5.8%) and plumbing fixtures (+4.3%) experienced the largest price increases.
“Even though April was the third consecutive month that input prices increased and overall materials prices remained elevated, there is little reason for contractors to be on high alert,” said ABC Chief Economist Anirban Basu. “The increase in materials prices was primarily driven by higher energy prices. In particular, the price of oil mainly rose for political reasons, and therefore is not an indication that materials prices will aggressively increase.
“What’s more, the year-over-year increase in construction input prices is a mere 2.4%, which is only slightly higher than overall inflation and a bit lower than wage growth,” said Basu. “With much of the global economy slowing and given ongoing trade tensions between American and Chinese policymakers, it’s likely materials price increases will remain modest going forward, even in the context of a robust nonresidential construction sector.
Related Stories
Industry Research | Jul 26, 2016
AIA consensus forecast sees construction spending on rise through next year
But several factors could make the industry downshift.
Architects | Jul 20, 2016
AIA: Architecture Billings Index remains on solid footing
The June ABI score was down from May, but the figure was positive for the fifth consecutive month.
Market Data | Jul 7, 2016
Airbnb alleged to worsen housing crunch in New York City
Allegedly removing thousands of housing units from market, driving up rents.
Market Data | Jul 6, 2016
Construction spending falls 0.8% from April to May
The private and public sectors have a combined estimated seasonally adjusted annual rate of $1.14 trillion.
Market Data | Jul 6, 2016
A thriving economy and influx of businesses spur construction in downtown Seattle
Development investment is twice what it was five years ago.
Multifamily Housing | Jul 5, 2016
Apartments continue to shrink, rents continue to rise
Latest survey by RENTCafé tracks size changes in 95 metros.
Multifamily Housing | Jun 22, 2016
Can multifamily construction keep up with projected demand?
The Joint Center for Housing Studies’ latest disection of America’s housing market finds moderate- and low-priced rentals in short supply.
Contractors | Jun 21, 2016
Bigness counts when it comes to construction backlogs
Large companies that can attract talent are better able to commit to more work, according to a national trade group for builders and contractors.
Market Data | Jun 14, 2016
Transwestern: Market fundamentals and global stimulus driving economic growth
A new report from commercial real estate firm Transwestern indicates steady progress for the U.S. economy. Consistent job gains, wage growth, and consumer spending have offset declining corporate profits, and global stimulus plans appear to be effective.
Market Data | Jun 7, 2016
Global construction disputes took longer to resolve in 2015
The good news: the length and value of disputes in the U.S. fell last year, according to latest Arcadis report.