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%.

“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 essentially unchanged over the past year, up less than half a percentage point. As a result of relatively tame input costs, a plurality of contractors expects their profit margins to expand over the next six months, according to ABC’s Construction Confidence Index."

“Additionally, the broader PPI measure of prices received by all domestic producers of final demand products and services rose 0.3% in January, well above the expected 0.1% increase,” Basu added. “This, along with the hotter-than-expected Consumer Price Index data released earlier this week, suggests that the Federal Reserve may keep interest rates elevated for longer than previously expected.”