WASHINGTON, DC — Data from the Bureau of Labor Statistics released on August 13 show both construction and nonresidential input prices increased 0.1% in July over the previous month.

Overall construction input prices are 7.4% higher than one year ago.  Nonresidential construction input prices are 7.2% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices decreased 11.9%, and unprocessed energy materials decreased 7.4%. Natural gas prices were up 10.4% in July.

Rising Prices - Continued Confidence

“Construction input prices were virtually unchanged in July, but that relatively tame behavior can be traced to the dip in fuel prices that occurred at the start of the month,” said ABC Chief Economist Anirban Basu. “Diesel fuel prices, for instance, surged more than $0.50 per gallon from the week prices were measured for the index through the end of July. Given the subsequent rebound in oil prices and ongoing increases in certain materials prices, such as lumber and iron and steel, materials prices will almost certainly continue to climb in the months to come.

“Materials prices remained up more than 7% on a year-over-year basis in July,” said Basu. “Despite this significant annual increase and the prospect of ongoing inflation, contractors on net expect their profit margins to expand over the next six months, according to ABC’s Construction Confidence Index.”

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.