Construction input prices decreased 0.2% in December compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices also decreased 0.2% for the month.
Overall construction input prices are 0.9% higher than a year ago, while nonresidential construction input prices are 0.6% higher. Prices increased in all three energy subcategories last month. Natural gas prices were up 57.7%, while unprocessed energy material prices increased 10.0%. Crude petroleum prices rose slightly, by 0.5%.
“Construction materials prices declined slightly in December and are virtually unchanged over the past two years,” said ABC Chief Economist Anirban Basu. “Of course, there is significant variability across input categories. Much of the recent moderation can be tracked to lower energy prices; diesel prices, for instance, are down roughly $0.45/gallon since December 2023. Prices for other inputs, like copper wire and cable or sand and gravel products, have escalated significantly over the past year. For the industry, however, the fact that overall input prices have remained flat in recent quarters is purely good news. Just 20% of contractors expect their profit margins to decline over the next six months, according to ABC’s Construction Confidence Index.”
