Latest from Construction Data

Photo 25446731 © Parkinsonsniper | Dreamstime.com
Dreamstime M 25446731
Photo 10604186 © 1971yes | Dreamstime.com
Dreamstime M 10604186
Photo 28530176 © Punyafamily | Dreamstime.com
Dreamstime M 28530176
Photo 8891960 © Hanhanpeggy | Dreamstime.com
Dreamstime M 8891960
Photo 142506244 © Arne Beruldsen | Dreamstime.com
Dreamstime M 142506244
Photo 9057145 © Joyfull | Dreamstime.com
Dreamstime M 9057145
Photo 28275882 © Tanawat Pontchour | Dreamstime.com
Dreamstime M 28275882
Photo 43271029 © Junnemui | Dreamstime.com
dreamstime_m_43271029

Construction Input Prices Decrease 1.2% in October

Nov. 15, 2023
The decrease was driven by lower prices for lumber, steel and energy.

WASHINGTON, DC — Construction input prices declined 1.2% in October on a monthly basis, according to an Associated Builders and Contractors analysis of US Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices fell 1.1% for the month.

Construction input prices are 1.1% lower than a year ago, while nonresidential construction input prices are 0.7% lower. Prices fell in 2 of the 3 energy subcategories last month. Crude petroleum input prices were down 2.9%, while unprocessed energy materials were down 0.3%. Natural gas prices rose 10.9% in October. Iron and steel prices fell 2.3%.

“The October construction materials prices report should be cheered by most contractors,” said ABC Chief Economist Anirban Basu. “Yesterday’s Consumer Price Index data and today’s Producer Price Index data indicate that inflation is declining. Not only does that translate into less rapid increases in the price of many key construction inputs, but it also signifies that the Federal Reserve is poised to begin reducing interest rates at some point next year. That will support an improving project financing environment, increasing demand for construction services in the process.

“That does not mean that all risks have disappeared,” said Basu. “Among the reasons for inflation’s retreat is a slowing economy. While financial markets have been laser-focused on good news on the inflation front in recent days, less attention has been invested in the downside risks to the economy, including growing consumer indebtedness, tighter credit conditions, geopolitics and the impact of the federal government’s insatiable appetite to take on more debt.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

Voice your opinion!

To join the conversation, and become an exclusive member of Contractor, create an account today!