Contractors Hot Line is part of the Catalyst Communications Network publication family.
Contractors Hot Line is part of the Catalyst Communications Network publication family.
Construction input prices increased 1.4% in January compared to December, according to an analysis by Associated Builders and Contractors of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Nonresidential construction input prices rose 0.9% for the month.
Overall construction input prices are up 1.3% from a year ago, while nonresidential input prices increased 0.7% over the same period.
Prices climbed across all three energy subcategories, with crude petroleum prices rising 14.8%, natural gas up 13.7% and unprocessed energy materials increasing 13.0%.
“Materials prices increased at the fastest monthly pace in two years in January,” ABC Chief Economist Anirban Basu said.
“This rapid escalation is largely due to three factors. First, energy prices rose sharply. Second, producers often raise their prices at the start of the year. And third, many purchasers rushed to buy inputs before potential tariffs could go into effect, and that surge in demand pushed prices higher.”
“Of these three factors, tariffs are the only one that could continue to push input prices higher in the coming months,” Basu said.
“Import taxes allow domestic producers to raise their prices, and the new 25% levies on steel and aluminum will result in just that if they remain in place. A strong majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, and the combination of increased demand for construction inputs and ongoing supply chain confusion suggests input price escalation could accelerate through the first half of 2025.”