Prices for inputs to construction fell 0.2% in July but are 9.5% higher than a year ago, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data released today. Nonresidential construction input prices increased fell 0.3% in July but are up 9.6% year over year. Softwood lumber prices are up 19.5% from July 2017, while iron and steel prices are up 13.4%.
“The monthly decline in construction input prices registered in July represents a departure from the recent trend,” said ABC Chief Economist Anirban Basu. “As is often the case, the question for the economist is how much weight to place on the most recent data point.
“In this instance, placing significant weight on July's PPI release would be equivalent to suggesting that the surge in materials prices has ended,” said Basu. “Putting less weight on the most recent bit of data means that July represents a statistical aberration, and that prices will rise in ways similar to the period preceding July.
“Given the ongoing strength of the U.S. construction sector and ongoing trade tussles, it would be difficult to conclude that the rise in materials prices is over,” said Basu. “It may be the case, however, that the pace of increase in materials prices is set to slow as suppliers ramp up production of key inputs in the wake of higher prices and as the U.S. dollar remains strong. In any case, it is far too early for estimators, chief financial officers and others to conclude that the construction input inflation cycle is over.”
Related Stories
Market Data | Jul 20, 2020
6 must reads for the AEC industry today: July 20, 2020
Never waste a crisis and robotic parking systems help developers optimize parking amenities.
Market Data | Jul 17, 2020
7 must reads for the AEC industry today: July 17, 2020
Kennedy Middle School's new Administration/Family Center and Tips to make optimal use of salvaged materials.
Market Data | Jul 16, 2020
Final NEPA rule will make it easier to rebuild infrastructure, reinvigorate the economy, and continue protecting the environment
Administration’s final reforms to the federal environmental review process fix problems with prior process, maintain environmental rigor, and accelerate needed infrastructure improvements.
Market Data | Jul 16, 2020
5 must reads for the AEC industry today: July 16, 2020
1928 hotel reimagined as a new resiential and cultural hub and Walgreens plans hundreds of doctor's offices at its stores.
Market Data | Jul 10, 2020
5 must reads for the AEC industry today: July 10, 2020
The world's tallest hybrid timber tower and the Florida Gators have a new $65 million ballpark.
Market Data | Jul 9, 2020
6 must reads for the AEC industry today: July 9, 2020
The world's most sustainable furniture factory and what will construction look like when COVID-19 ends?
Market Data | Jul 8, 2020
North America’s construction output to fall by 6.5% in 2020, says GlobalData
Even though all construction activities have been allowed to continue in most parts of the US and Canada since the start of the COVID-19 pandemic, many projects in the bidding or final planning stages have been delayed or canceled.
Market Data | Jul 8, 2020
5 must reads for the AEC industry today: July 8, 2020
AEMSEN develops concept for sustainable urban living and nonresidential construction has recovered 56% of jobs lost since March.
Market Data | Jul 7, 2020
Nonresidential construction has recovered 56% of jobs lost since March employment report
Nonresidential construction employment added 74,700 jobs on net in June.
Market Data | Jul 7, 2020
7 must reads for the AEC industry today: July 7, 2020
Construction industry adds 158,000 workers in June and mall owners open micro distribution hubs for e-commerce fulfillment.