Construction input prices continue to rise

Construction input prices increased 0.9 percent in April on a monthly basis and 2.4 percent compared to the same time last year, according to an Associated Builders and Contractors (ABC) analysis of recently released U.S. Bureau of Labor Statistics (BLS) data. Nonresidential input prices rose 0.9 percent compared to March and are up 2.8 percent on an annual basis.

Among the 11 sub-categories, seven experienced price decreases last month, with the largest decreases in natural gas (-8.7 percent), iron and steel (-1.7 percent), and steel mill products (-1.7 percent). The four sub-categories that experienced monthly price increases were crude petroleum (+13.9 percent), unprocessed energy materials (+3.7 percent), prepared asphalt products (+2.7 percent) and concrete products (+1.1 percent). Year over year, prepared asphalt products (+7.5 percent), steel mill products (+5.8 percent) and plumbing fixtures (+4.3 percent) 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,” says 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 percent, which is only slightly higher than overall inflation and a bit lower than wage growth,” Basu says. “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."

See the full breakdown of prices here.