Construction input prices remained unchanged in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices were also unchanged for the month.
Overall construction input prices are 4.9% lower than a year ago, while nonresidential construction input prices are 4.5% lower. Prices decreased in all three energy subcategories in June. Crude petroleum prices were down 5.9%, while natural gas prices fell 5.3%. Unprocessed energy materials prices decreased 5.0% for the month.
“The pandemic-induced period of rapid construction input cost increases is over,” said ABC Chief Economist Anirban Basu. “Today’s Producer Price Index data, along with yesterday’s Consumer Price Index release, show that inflation has slowed, at least with regard to goods prices. This recent moderation is partially due to a drastic improvement in supply chains; both international and domestic freight rates have plunged back toward pre-pandemic levels.
“Despite this recent cooling, construction input prices are still up more than 38% since the start of the pandemic,” said Basu. “That’s over twice the increase observed for economywide prices over that span. Contractor confidence declined last month, according to ABC’s Construction Confidence Index, and the combination of expensive materials, high interest rates that are likely to rise again at the Federal Reserve’s July meeting and tight credit conditions will put downward pressure on construction activity over the next few quarters.”
Related Stories
Contractors | Oct 26, 2018
Three ways construction leaders harness digital transformation
The construction industry is lagging behind others when it comes to digital transformation. Some construction firms “are still using paper-based processes that can only be described as archaic,” according to a 2016 report by PricewaterhouseCoopers LLP’s Strategy1.
Contractors | Oct 24, 2018
How seasoned construction pros handle the cost of scaling up
Here’s how seasoned operators meet the new demand for homes, offices and new locations without drowning in new expenses.
Contractors | Oct 2, 2018
Nonresidential spending reaches new high in August
Total nonresidential spending stood at $762.7 billion in August, an increase of 8.4% compared to one year ago.
Contractors | Oct 2, 2018
Katerra adds a Denver-area GC to its growing stable
Bristlecone Construction brings self-performing expertise in concrete and framing.
Architects | Sep 14, 2018
We’ve entered the golden age of brain science. What does it mean for AEC firms?
New research from the SMPS Foundation explores the known principles and most recent research surrounding the human brain and behavioral science. The goal: to discover connections between the science and the AEC business.
Contractors | Sep 5, 2018
Lean, tech, talent training highlight contractor innovations
From 5D estimating tools to interactive punch lists, the nation’s largest construction and construction management firms continue to push technology to gain an edge.
Modular Building | Aug 6, 2018
More contractors are turning to offsite production for speed and quality
Skender launches an advanced manufacturing division. Katerra ups its bet on modular. Prefabrication comes to the rescue on multiple projects.
Architects | Aug 1, 2018
Client experience as competitive advantage for AEC firms
Clients are looking for solutions to their business problems from collaborative advisors. They’ve come to expect a higher level of service and detail than what was provided in the past.
Codes and Standards | Jul 31, 2018
Workers allegedly held in captivity by construction subcontractor in San Jose pay theft case
Contractor pays $250,000 in back wages in Dept. of Labor enforcement action.
Building Team | Jul 30, 2018
Construction tech is the new investment darling for VC funds
In the first half of 2018, venture capital firms invested $1.05 billion in global construction tech startups, setting a record high.