Dive Brief:
- Construction input prices remained unchanged in November, with nonresidential construction input prices ticking up just 0.1% over the past month, according to an analysis by Associated Builders and Contractors.
- Though overall input prices sit about 0.5% higher than a year ago, certain materials continue to see significant increases, according to the report.
- The flat monthly input prices come amid reaccelerating inflation in the broader economy, as the Consumer Price Index has increased 2.7% for the year, said Anirban Basu, ABC chief economist. While that’s above the Federal Reserve’s 2% inflation target, he added contractors remain optimistic about the next six months, with more than 60% expecting sales growth.
Dive Insight:
The no change suggests ongoing stability in overall construction input prices, but close analysis reveals mixed pressures for contractors, said Basu.
For example, much of that price stabilization stems from a reduction in energy costs, as opposed to specific construction materials. Natural gas prices decreased 17.3% year over year and unprocessed energy materials dropped 11.9% during the same period.
“Construction input prices are up just 0.2% through the first 11 months of 2024,” said Basu in the release. “However, that encouraging year-to-date price growth primarily reflects declining energy prices and obscures price escalation that has occurred for specific materials. Prices for copper wire and cable and softwood lumber, for instance, are up nearly 12% year over year.”
Costs for copper and brass mill shapes jumped about 15% over the past year, whereas aluminum mill shapes increased 7.4%, said Macrina Wilkins, senior research analyst with the Associated General Contractors of America, in an email to Construction Dive. Those rises align with the broader increases Basu noted.
“While input prices have, in total, been well behaved, yesterday’s Consumer Price Index release indicated that economywide inflation reaccelerated in November,” said Basu. “The recent uptick suggests that inflation may prove more stubborn than previously expected.”
