Construction Input Prices Expand for Third Straight Month
Construction input prices expanded 0.3 percent on a monthly
basis and 4.8 percent on a year-over-year basis in February,
according to analysis of U.S. Bureau of Labor Statistics (BLS) data
released today by Associated Builders and Contractors (ABC). This
represents the most rapid yearly growth in construction input
prices in more than five years.
Only four key inputs tracked by BLS
experienced monthly price declines, principally natural gas.
Natural gas prices declined 18 percent in February, but are still
up by more than 66 percent over the past year. Crude petroleum
prices are up 107 percent over the past year.
"There is growing evidence of
inflationary pressures throughout the economy, and construction
materials prices are no exception," said ABC Chief Economic Anirban
Basu. "After declining during the latter half of 2014 and
throughout 2015, global commodity prices have begun to stabilize.
There are many reasons for this, including a somewhat more stable
global economy, decisions by producers to reduce supply, general
increases in asset prices and expansionary monetary policy in much
of the advanced world.
"Still, contractors should not worry
excessively about prospects for massive additional increases in
materials prices," continued Basu. "The global economy is hardly
poised to boom given structural factors like demographics and
indebtedness. The U.S. dollar has continued to strengthen, which
has helped to keep a lid on commodity price increases. Moreover,
energy prices have begun to retrench recently, including oil
prices, which fell below $50/barrel over the last few
"Of course, if the Trump
administration is successful in implementing a proposed $1 trillion
infrastructure package, dynamics change," said Basu. "Under those
circumstances, concrete and other materials prices stand to rise