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.

"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 Confidence Index," Basu continued. "Ongoing input price moderation, along with the prospect of lower interest rates by the end of the third quarter, should bolster contractor sentiment in the coming months."

The uptick follows June’s 0.3% decline. Prices for concrete products remained flat while the prices of gypsum and insulation rose slightly. Softwood lumber, iron and steel, and steel mill products were each shown to have dropped considerably. 

A look at how the cost of construction has impacted the architecture industry recently can be found here.