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Construction input prices rise 0.3% in October, led by increased energy costs

2024-11-14T14:19:00-05:00

A new report by the Associated Builders and Contractors (ABC), analyzing the U.S. Bureau of Labor Statistics’ Producer Price Index data has revealed that construction input prices increased 0.3% in October. Nonresidential construction input prices also increased 0.3% for the month.

Last month, prices in all three energy subcategories increased. Natural gas prices increased by 29.3%, unprocessed energy materials prices rose 9.9%, and crude petroleum prices went up by 7.3%. Overall, construction input prices are 0.2% lower than they were a year ago, and nonresidential construction input prices are 0.5% lower.

Chart credit: Associated Builders and Contractors

“Higher energy prices drove the increase in construction input prices observed in October,” said ABC Chief Economist Anirban Basu. “While prices for a few other materials, like concrete and copper products, also rose for the month, overall input prices are lower than they were one year ago and have fallen 5% since reaching an all-t...

Construction Input Prices drop 0.9% in September

2024-10-11T14:34:00-04:00

A new analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data from the Associated Builders and Contractors (ABC) has show construction input to have decreased by 0.9% for the month of September. Nonresidential construction input prices also decreased 0.9% for the month.

Prices of concrete products were up 0.3% and steel miil products went down 1.3%. Gypsum products also rose 0.6% in September. Overall construction input prices are now 1.9% lower than a year ago, while nonresidential construction input prices are 2.1% lower.

Chart credit: Associated Builders and Contractors

"The decline in construction input costs observed in September was almost entirely due to a large decrease in oil prices," ABC Chief Economist Anirban Basu said. 'Certain materials, like gypsum, fabricated structural-metal products, asphalt and lumber exhibited sizable price increases for the month."

Chart credit: Associated Builders and Contractors

"While domestic freight rates are low by historical ...

Construction input prices tick up by 0.1% in August

2024-09-13T10:45:00-04:00

Construction input prices increased slightly by 0.1% in August, according to a recent Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data.

Nonresidential construction input prices increased 0.2% for the month. Overall construction input prices are now 0.7% lower than they were a year ago, while nonresidential construction input prices are down by 0.9%.

Chart credit: Associated Builders and Contractors

“Construction input prices are now down almost a full percentage point over the past year,” ABC Chief Economist Anirban Basu said. “This is a welcome development for contractors, a plurality of whom now expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index. Moderating materials price escalation, along with easing labor constraints and the near certainty that the Federal Reserve will begin lowering interest rates at its next meeting, should provide some relief to con...

Construction input prices up again by 0.4% in July

2024-08-14T15:17:00-04:00

Nationwide, construction input prices increased by 0.4% in July, according to a new analysis of the U.S. Bureau of Labor Statistics Producer Price Index by Associated Builders and Contractors (ABC). Nonresidential construction input prices also increased 0.4% for the month. Overall, construction input prices are 1.1% higher than they were a year ago, and nonresidential construction input prices are another 0.8% higher.

This ends a two-month streak of consecutive declines following six straight months of increases to begin 2024. "Despite the monthly uptick, which was largely driven by higher petroleum and natural gas prices, input prices are up just 1.1% year over year," ABC Chief Economist Anirban Basu stated.

Chart credit: Associated Builders and Contractors

"The lack of materials price escalation over the past 12 months is a welcome development for contractors, just 34% of whom expect their profit margins to expand over the next six months, according to ABC’s Construction Confidenc...

Construction input prices fall 0.3% in June

2024-07-15T15:28:00-04:00

Construction input prices fell by 0.3% in June, according to the latest Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics' Producer Price Index. For the month, Nonresidential construction input prices declined by 0.4%. Overall construction input prices are 1.1% higher than year-ago levels, while nonresidential construction input prices are 0.7% higher.

Prices for lumber and wood products remain unchanged, while the cost of softwood lumber decreased by 0.5%, and concrete products went up by 0.4%. This is the second consecutive month of overall input price declines following a spate of consecutive increases that were recorded beginning last December.

Chart credit: Associated Builders and Contractors

“Construction materials prices dipped in June, perhaps a reflection of declining project starts in a number of construction segments and an associated dip in demand,” said ABC Chief Economist Anirban Basu. “For instance, input prices fell in the mu...

Construction input prices decline in May for the first time since December

2024-06-25T11:16:00-04:00

New analytic reporting on U.S. Bureau of Labor Statistics Producer Price Index data for May from the Associated Builders and Contractors (ABC) has documented an overall 0.9% decrease in construction input prices.

For the month, nonresidential construction input prices fell by 0.8%. Overall construction and nonresidential construction input prices are 2.1% and 2.2% higher, respectively, than a year ago. The cost of concrete decreased slightly by 0.1%, while the cost of steel products rose by 0.5%. Gypsum product prices went up by 0.4%, and decreases were also recorded in 2 of the 3 energy subcategories.

Chart credit: Associated Builders and Contractors

"For contractors, this data provides excellent news along two fronts," said ABC Chief Economist Anirban Basu. "First, construction input prices fell for the first time since December and, despite rising somewhat sharply over the first four months of 2024, are up just 2.1% year over year. Second, the Producer Price Index’s economywide m...

Construction input prices rise another 0.5% in April

2024-05-14T14:37:00-04:00

The latest analysis of U.S. Bureau of Labor Statistics Producer Price Index data for April from the Associated Builders and Contractors (ABC) shows a 0.5% increase in construction input prices.

For the month, nonresidential construction input prices increased by 0.6%. Overall construction and nonresidential construction input prices are 2.3% and 2.2% higher, respectively than a year ago. The cost for concrete and steel mill products decreased slightly at 0.2% and 2.7% each over April, while prices increased in 2 of the 3 energy subcategories for the month overall.

Chart credit: Associated Builders and Contractors

“Construction input prices jumped half a percentage point higher in April and have increased 3.5% over the first four months of the year,” ABC’s Chief Economist Anirban Basu stated. “While iron, steel, asphalt and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when ne...

Construction input prices climb 0.4% in March

2024-04-12T11:42:00-04:00

A new analysis of the latest U.S. Bureau of Labor Statistics Producer Price Index data from the Associated Builders and Contractors (ABC) has shown an increase in the cost of construction input prices of 0.4% for March.

In the month, nonresidential construction input prices increased by 0.4%. Both overall and nonresidential construction input prices are 1.7% higher than they were a year ago.

The overall increase came despite declines in the cost of energy inputs, with natural gas prices down 37%, unprocessed energy materials down 6.9%, and crude petroleum down 0.8%.

Chart credit: Associated Builders and Contractors

“There has been growing evidence of resurfacing inflationary pressures in the nation’s nonresidential construction segment during the past two months,” said ABC Chief Economist Anirban Basu. “Were it not for declines in energy prices, the headline figure for construction input price dynamics would have been meaningfully higher. A new set of supply chain issues is emerging,...

Nonresidential construction spending declines 1.0% for February, according to new ABC analysis

2024-04-03T12:53:00-04:00

Spending on nonresidential construction declined 1.0% in February to a seasonally adjusted total of $1.179 trillion, according to an Associated Builders and Contractors (ABC) analysis of data published this week by the U.S. Census Bureau.

The figures showed a decrease in spending for 15 of the 16 nonresidential subcategories on a monthly basis. Private nonresidential spending fell 0.9%, while public nonresidential construction spending was down 1.2% in February.

“Virtually every nonresidential construction segment experienced a decline in spending in February,” said ABC Chief Economist Anirban Basu. “In certain instances, the monthly decline was sharp, including health care (-2.2%), commercial (-1.9%) and water supply (-1.8%). The optimist will likely shrug off both the January and February nonresidential construction spending declines as merely reflecting winter weather. The pessimist will proclaim this release a wake-up call to contractors and an indication that higher interest r...

Construction input prices climb 1.4% in February

2024-03-15T17:21:00-04:00

In the month, nonresidential construction input prices increased by 1.3%. Overall construction input prices are 1.5% higher than they were a year ago, while nonresidential construction input prices are a total of 1.8% higher.

The prices for softwood lumber (1.7%), concrete (0.3%), construction sand/gravel (1.0%), and insulation materials (2.1%) all rose, while a drop of 0.3% was recorded for fabricated structural steel metal products.

Chart credit: Associated Builders and Contractors

“For the last several weeks, inflation data have been coming in hotter than anticipated,” said ABC Chief Economist Anirban Basu. “This was also true for the February construction input price data, which indicated that upward price pressures are reemerging after a period of calm. Month...

Construction input prices rise 1% for January following December drop

2024-02-23T13:59:00-05:00

The value of construction input prices increased by 1% for the month of January when compared to December’s totals, according to an Associated Builders and Contractors (ABC) analysis of the latest U.S. Bureau of Labor Statistics Producer Price Index data.

For the month, nonresidential construction input prices increased 0.9%. Overall construction input prices are now 0.4% higher than they were a year ago, with nonresidential construction materials prices another 0.7% higher.

Steel mill product input prices were up 5.4%, while construction sand, gravel, and crushed stone rose 3.3%, softwood lumber 1.1%, and concrete products 0.8%. The price of gypsum products declined by 1.3%.

Chart credit: Associated Builders and Contractors

“Construction materials prices surged in January, ending a streak of three consecutive monthly declines,” ABC's Chief Economist Anirban Basu commented on the findings. “While this represents the largest monthly increase since August 2023, input prices are essenti...

Construction input prices drop again for December, driven by declines in all sectors

2024-01-16T14:43:00-05:00

The latest Associated Builders and Contractors (ABC) construction input price analysis for the month of December has registered a 0.6% decrease over November’s trend-reversing totals. Nonresidential construction input prices were down another 0.4%, with the commercial and multifamily sectors declining by 0.2% and 0.5%, respectively.

Overall construction input prices are now 1.2% higher than a year ago, and nonresidential construction input prices are another 1.6% higher. The price of softwood lumber has notably fallen by 14.6% in a 12-month span, joined by a substantial decline in the price of natural gas, which was down some 60.5% in the same time period.

Chart credit: Associated Builders and Contractors

“Construction input prices fell sharply in December,” ABC’s Chief Economist, Anirban Basu, said in a news release. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year du...

October sees construction costs decline

2023-11-16T17:28:00-05:00

A new Associated Builders and Contractors (ABC) analysis of statistics provided by the U.S. Bureau of Labor Statistics Producer Price Index data has shown a slight decline in construction input prices of 1.2% for the month of October.

Per ABC’s analysis, Construction input prices are 1.1% lower than a year ago, while nonresidential construction input prices are recorded as being another 0.7% lower. Prices fell in 2 of the 3 energy subcategories last month, propelled by a drop in crude petroleum input prices of 2.9%. Unprocessed energy materials were also recorded to be down 0.3%, while natural gas prices rose 10.9% in October. Iron and steel prices also fell by 2.3% on the month overall.

Only inputs to Industrial projects and multifamily housing construction was shown to have risen year-over-year, according to the ABC.

“The October construction materials prices report should be cheered by most contractors,” ABC Chief Economist Anirban Basu said of the report. “Yesterday’s Consume...

Construction input prices marginally increased from last month, remaining 41% above pre-pandemic levels

2023-10-16T11:50:00-04:00

Construction input prices remain marginally higher than one year ago, according to an analysis of U.S. Bureau of Labor Statics Producer Price Index data conducted by the Associated Builders and Contractors (ABC). Overall construction input prices are 0.3% higher than a year ago, while nonresidential construction prices are 0.6% higher.

According to the ABC analysis, overall input prices have increased 0.2% over the past month, driven by a 10.1% increase in the price of crude petroleum, a 7.5% increase in unprocessed energy materials, and a 0.1% increase in natural gas prices. Among the inputs that decreased in value over the past month were steel mill products (down 3.7%), softwood lumber (down 1.7%), and iron and steel (down 2.4%).

Meanwhile, the inputs that have driven the 0.3% overall increase over the past year are brick and structural clay tile (up 6.4%), concrete products (up 9.1%), and construction machinery and equipment (up 6.1%). Price reductions that have helped counter s...

Hike in fuel costs drives first increase in construction input prices in six months

2023-09-18T08:00:00-04:00

Construction input prices ticked up 1.5% in August, the first increase in six months, due to a surge in energy costs, according to a new Associated Builders and Contractors’ analysis of U.S. Bureau of Labor Statistics Producer Price Index data released Thursday.

These readings come as a shock as the flattening of costs suggested that inflation was cooling. According to a separate analysis from the Associated General Contractors of America, a major increase in diesel fuel costs in August drove the overall increase in materials prices. The producer price index jumped 34.6% last month, which is the largest one-month hike since 1990. In addition, other construction materials such as concrete and switchgear also experienced price increases.

Associated Builders and Contractors (ABC) chief economist Anirban Basu expects future readings to demonstrate excess inflation as labor costs continue to rise, aggressive spending continues, oil-producing nations limit output, and global supply chains reorganize.

Nonresidential construction spending shows marginal growth in ABC analysis

2023-09-05T14:56:00-04:00

National nonresidential construction spending saw a modest rise of 0.1% in July, according to a new analysis by the Associated Builders and Contractors (ABC) of U.S. Census Bureau data. When adjusted for seasonality on an annualized basis, nonresidential spending stood at $1.08 trillion, marking a 16.5% increase from the previous year.

The report found that of the 16 nonresidential subcategories, eight recorded an uptick in spending on a month-over-month basis. Private nonresidential spending showed an increase of 0.5%, while public nonresidential construction spending saw a decline of 0.4%.

“After today’s jobs report, which indicated that nonresidential construction added an outsized number of jobs in August, one would have expected a strong construction spending growth number as well,” said ABC Chief Economist Anirban Basu in a statement. “Alas, the economic data, just like the economy, continue to be full of surprises. In July, nonresidential construction spending barely expanded...

Leveling construction material costs and supply chain relief may signal inflation cooling, new report finds

2023-08-14T16:55:00-04:00

The latest Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data indicates that increasingly stable construction materials prices and recent supply chain improvements over the past few months may signal "positive economic outcomes" within the United States, Construction Dive reports.

"Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy," ABC Chief Economist Anirban Basu explained in the analysis. "It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S. economy. As supply chains have normalized, unmet demand has been more readily satisfied. That has propelled transactional volume and economic growth."

Image source: U.S. Bureau of Labor Statistics via the ABC (Aug 2023).

"At the same time," Basu continued, "the improved supply chain has helped push prices lower, contributing to the disinflation observable both in yesterday’...

Construction input prices have declined almost 4% in one year

2023-06-19T09:00:00-04:00

A new analysis by the Associated Builders and Contractors (ABC) has found that overall construction input prices are 3.7% lower than a year ago. Derived from new data from the U.S. Bureau of Labor Statistics Producer Price Index, the ABC analysis also found that construction input prices fell 0.6% in May alone compared to the previous month.

The drop was fuelled by a decline in all three energy subcategories between April and May, with crude petroleum falling 10.2%, unprocessed energy materials falling 7.8%, and natural gas prices falling 2.0%.

Image credit: Associated Builders and Contractors

“The headline numbers suggest broad-based deflation in construction materials prices,” said ABC Chief Economist Anirban Basu about the figures. “But the declines in input prices are less broad than meets the eye. Much of the deflation is tied to energy, steel, and softwood lumber.”

Basu noted that beyond energy, steel, and lumber spheres, there are also notable examples of price inflation. Conc...

Construction input prices drop to 18-month lows

2023-04-17T17:57:00-04:00

A new Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data has shown a year-to-year decline in the cost of construction input prices for the first time in 18 months.

Overall construction input prices are now 0.9% lower compared to March of 2022, while nonresidential construction prices were recorded as having fallen 0.6% during the same time period.

According to the Bureau’s Producer Price Index for March, Iron and Steel as well as Steel Mill Products posted the largest gains since February 2020 at 63.9% and 70.6%, respectively. Prices for Natural Gas and Unprocessed Energy Materials also showed increases. Only eight of the 19 commodities price categories showed decreases since last month, despite the month-to-month decline.

Image: Associated Builders and Contractors

“The good news is that the latest producer price index data, which show broad-based declines in both goods and service...

Nonresidential construction spending rises by nearly 1% in November, driven by boosts in manufacturing and conservation projects

2023-01-06T12:46:00-05:00

According to a recent analysis of U.S. Census Bureau data by the Associated Builders and Contractors (ABC), national nonresidential construction spending rose 0.9% in November. On a seasonally adjusted annualized basis, spending in this sector totaled $930.1 billion for the month.

Across the 16 nonresidential subcategories, nine saw increases in spending over the month. Subcategories that experienced dips in spending in November include: commercial, health care, communication, highway and street, amusement and recreation, public safety, and water supply. While spending in these areas fell, each except communication saw growth over 12 months. Notable growth came in the manufacturing and conservation and development subcategories, which led the group with 6.4% and 14.6% increases, respectively. Additionally, private nonresidential spending was up 1.7%, while public nonresidential spending fell 0.1% in November.

Image courtesy of Associated Builders and Contractors

“The average nonresi...

Nonresidential construction spending increased by 0.8% in July, carried by gains in public projects

2022-09-09T11:55:00-04:00

National nonresidential construction spending has increased by a modest 0.8% in July, according to an analysis of government spending data from the U.S. Census Bureau by Associated Builders and Contractors (ABC). On a seasonally adjusted annualized basis, nonresidential spending totaled $847.6 billion last month.

Spending increased on a monthly basis in 13 of the 16 nonresidential subcategories, with declines in sewage and waste disposal, water supply, and health care. Spending on highways and streets and public safety saw the largest jumps over the month, up 4.4% and 2.3%, respectively. Public safety, however, is still down 4.7% over the last year.

Gains in public nonresidential spending helped keep the nonresidential sector positive in July, even while overall construction spending fell 0.4% last month.

Image courtesy of Associated Builders and Contractors

“The nonresidential sector continues to grapple with rising borrowing costs, elevated materials and labor costs and pervasiv...

Construction costs projected to see largest increase in years due to supply and demand pressures

2022-08-29T15:44:00-04:00

According to CBRE's new 2022 U.S. Construction Cost Trends report, nationwide industry price levels have posted the largest increase in years, driven by labor shortages, inflation, supply chain disruptions, the ongoing impact of the pandemic, and the war in Ukraine.

CBRE forecasts a 14.1 percent year-over-year increase in construction costs by the end of the year, an increase from last year’s 11.5 percent gain. This 2022 figure is the largest increase since CBRE began tracking cost projections in 2007, exceeding the average rise of 2 percent to 4 percent per year. Following 2022, CBRE predicts cost increases to decline back to their historical range at 4.3 percent next year and 2.9 percent in 2024 as supply chain issues, inflation, and material production difficulties ease.

“The construction industry thrives on predictability, but we continue to grapple this year with nume...