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Construction Materials Prices Surge in April

May 15, 2024
No relief in sight on the material pricing front.

Construction input prices increased 0.5% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices increased 0.6% for the month.

Overall construction input prices are 2.3% higher than a year ago, while nonresidential construction input prices are 2.2% higher. Prices increased in 2 of the 3 energy subcategories last month. Crude petroleum prices were up 10.6%, while unprocessed energy materials prices increased 8.2%. Natural gas prices were down 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.”

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