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 | Aug 29, 2017
Hidden opportunities emerge from construction industry challenges
JLL’s latest construction report shows stability ahead with tech and innovation leading the way.
Market Data | Aug 28, 2017
U.S. hotel construction pipeline is up 7% year-over-year
For the economy, the rate of growth may be low but it’s running on all cylinders.
Market Data | Aug 23, 2017
Architecture Billings Index growth moderates
“The July figures show the continuation of healthy trends in the construction sector of our economy,” said AIA Chief Economist, Kermit Baker.
Architects | Aug 21, 2017
AIA: Architectural salaries exceed gains in the broader economy
AIA’s latest compensation report finds average compensation for staff positions up 2.8% from early 2015.
Market Data | Aug 20, 2017
Some suburban office markets are holding their own against corporate exodus to cities
An analysis of mortgage-backed loans suggests that demand remains relatively steady.
Market Data | Aug 17, 2017
Marcum Commercial Construction Index reports second quarter spending increase in commercial and office construction
Spending in all 12 of the remaining nonresidential construction subsectors retreated on both an annualized and monthly basis.
Industry Research | Aug 11, 2017
NCARB releases latest data on architectural education, licensure, and diversity
On average, becoming an architect takes 12.5 years—from the time a student enrolls in school to the moment they receive a license.
Market Data | Aug 4, 2017
U.S. grand total construction starts growth projection revised slightly downward
ConstructConnect’s quarterly report shows courthouses and sports stadiums to end 2017 with a flourish.
Market Data | Aug 2, 2017
Nonresidential Construction Spending falls in June, driven by public sector
June’s weak construction spending report can be largely attributed to the public sector.
Market Data | Jul 31, 2017
U.S. economic growth accelerates in second quarter; Nonresidential fixed investment maintains momentum
Nonresidential fixed investment, a category of GDP embodying nonresidential construction activity, expanded at a 5.2% seasonally adjusted annual rate.