ABC: Construction Input Prices Inch Up in August, But Lower Than 1 Year Ago

WASHINGTON (Sept. 12, 2024) — Construction input prices increased 0.1% in August compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.2% for the month.

Prices decreased in all three energy subcategories last month. Natural gas prices fell by 29.8%, while unprocessed energy materials and crude petroleum prices declined by 7.5% and 4.2%, respectively. Overall construction input prices are 0.7% lower than a year ago, while nonresidential construction input prices are down by 0.9%.

“Construction input prices are now down almost a full percentage point over the past year,” said ABC Chief Economist Anirban Basu. “This is a welcome development for contractors, a plurality of whom now expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index. Moderating materials price escalation, along with easing labor constraints and the near certainty that the Federal Reserve will begin lowering interest rates at its next meeting, should provide some relief to contractors over the next several months.”