Construction Material Prices Rise In July, ABC Says
Washington, DC - Construction input prices increased 0.4% in July compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices also increased 0.4% for the month.
Overall construction input prices are 2.2% higher than a year ago, while nonresidential construction input prices are 2.6% higher. Prices increased in 2 of the 3 energy categories last month. Crude petroleum and unprocessed energy materials prices were up 1.7% and 0.5%, respectively, while natural gas prices decreased 2.1% in July.
“Construction materials prices continued to increase too quickly in July,” said ABC Chief Economist Anirban Basu. “Nonresidential input prices have risen at a 5.8% annualized rate since January, and trade policy will likely continue to put upward pressure on materials prices over the next several months. Copper wire and cable prices, for instance, surged 5% in July and are now up 12.2% over the past year. While contractors remain relatively upbeat, according to ABC’s Construction Confidence Index, input price escalation may diminish profit margins during the final months of the year.
“The rapid increase in broader producer prices in July is just as worrying as rising construction input costs,” said Basu. “With prices for final demand goods and services rising at the fastest pace since March 2022, the Federal Reserve will have to consider the prospect of resurgent inflation when deciding whether or not to cut rates at its September meeting. The construction industry is in desperate need of lower borrowing costs, and higher rates for longer would continue to weigh on construction spending.”
About The Associated Builders And Contractors
Associated Builders and Contractors is a national construction industry trade association representing more than 23,000 members. Founded on the merit shop philosophy, ABC and its chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. To learn more, visit www.abc.org.