According to an analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today by the Associated Builders and Contractors, construction input prices increased by 1.2% in August compared to the previous month.
Input prices for nonresidential construction also increased by 1.2% for the month.
Nonresidential construction input prices have increased by 8.8%, while overall construction input prices have increased by 8.9% from one year ago.
Energy prices increased in two of the three subcategories last month.
In August, crude petroleum prices increased by 5.2%, unprocessed energy materials prices increased by 1.5%, and natural gas prices decreased by 11.6%.
Anirban Basu, the Chief Economist of ABC, reported that construction input prices soared once more in August, and the increases were widespread across materials.
“The prices of iron and steel, softwood lumber, switchgear, copper wire and cable, and several derivative metal products have increased by over 10% year over year.” According to ABC’s Construction Confidence Index, profitability is expected to be affected by the ongoing escalation of input prices in the coming months, despite the fact that contractors are optimistic about their margins.
This is particularly accurate in light of the recent escalation in the trade war with Canada and the fact that oil prices have risen above $100 per barrel.
[Read more about this topic on abc.org]