Dive Brief:
- Construction input prices decreased 0.9% in September due to dips in two of three energy subcategories, according to an analysis by Associated Builders and Contractors.
- The drop reflects the trend of overall material price stabilization over the past 12 months. Construction input prices are 1.9% lower than a year ago, while nonresidential construction input prices dropped 2.1% during that span, according to the report.
- “The decline in construction input costs observed in September was almost entirely due to a large decrease in oil prices,” said Anirban Basu, ABC chief economist. Nevertheless, certain materials posted notable price increases for the month, including gypsum, fabricated structural-metal products, asphalt and lumber.
Dive Insight:
Material prices remained relatively stable in September, said Macrina Wilkins, senior research analyst with the Associated General Contractors of America, in an email to Construction Dive.
However, Wilkins pointed out that over the past year, there has been significant variation in specific materials, particularly with diesel, fabricated structural metal, steel mill products, insulation and copper and brass mill shapes.
Meanwhile, elevated global container-shipping rates and emerging supply chain issues could put upward pressure on materials prices in the coming months, said Basu.
That’s a cause for concern for contractors, many of whom still expect their profit margins to contract over the next six months, according to ABC. Overall, inputs to nonresidential construction remain 39% higher than they were in February 2020, before the COVID-19 pandemic.
Courtesy of Associated Builders and Contractors
Prices decreased in two of the three energy subcategories in September, according to ABC. Crude petroleum prices dropped 16.7%, while unprocessed energy materials decreased 12.6%. Natural gas prices, on the other hand, ticked up 2.4% in September.