Contractors Hot Line is part of the Catalyst Communications Network publication family.
Contractors Hot Line is part of the Catalyst Communications Network publication family.
In April, construction input prices experienced a 0.5% uptick compared to the previous month, as per the latest data from the U.S. Bureau of Labor Statistics Producer Price Index, analyzed by the Associated Builders and Contractors. Nonresidential construction input prices rose by 0.6% during the same period.
Year-on-year comparisons reveal a 2.3% increase in overall construction input prices and a 2.2% rise in nonresidential construction input prices. Among energy subcategories, prices saw an upward trend in two out of three sectors. Crude petroleum prices surged by 10.6%, while unprocessed energy materials experienced an 8.2% increase. However, natural gas prices dipped slightly by 0.9%.
“Construction input prices jumped half a percentage point higher in April and have increased 3.5% over the first four months of the year,” said ABC Chief Economist Anirban Basu. “While iron, steel, asphalt and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when nearly 1 in 4 contractors expect their margins to contract over the next two quarters, according to ABC’s Construction Confidence Index.
“Perhaps more importantly for contractors, the overall Producer Price Index reading for final demand goods and services increased 0.5% in April,” said Basu. “This is yet another sign that inflation is accelerating and suggests that interest rates are set to stay higher for longer.”