Construction Input Prices Surge in May, Up Nearly 10% Yearly
Key Highlights
- Construction input prices increased by 2.6% in May, with a 9.6% rise over the past year
- Energy prices saw mixed changes: crude petroleum up 11.8%, unprocessed energy materials up 6.9%, but natural gas down 18.2%
- Tariff-affected inputs like iron, steel, and copper continue to drive price growth, raising concerns about future profit margins
WASHINGTON, DC — On June 11, the US Bureau of Labor Statistics released Producer Price Index data for the month of May. Construction input prices increased 2.6% in May over the previous month, while nonresidential construction input prices increased 2.4% for the month.
Overall construction materials prices are now 9.6% higher than one year ago, with nonresidential construction input prices are 9.7% higher. Prices increased in 2 of the 3 energy subcategories last month.
Crude petroleum prices increased 11.8% and unprocessed energy materials increased 6.9%. Natural gas prices were down 18.2% in May.
“Construction input prices surged again in May and are now up nearly 10% year over year,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper.
"Contractors remain optimistic that their profit margins will expand over the next six months, according to ABC’s Construction Confidence Index, yet it appears likely that materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability.”
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.