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.

“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 nearly 1 in 4 contractors expect their margins to contract over the next two quarters, according to ABC’s Construction Confidence Index.”

“Perhaps more importantly for contractors, the overall Producer Price Index reading for final demand goods and services increased 0.5% in April,” added Basu. “This is yet another sign that inflation is accelerating and suggests that interest rates are set to stay higher for longer.”