Construction input prices decreased 0.3 percent in November compared to October, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices decreased 0.3 percent for the month as well. Inputs to construction are still nearly 39 percent higher than at the start of the COVID-19 pandemic.
Overall construction input prices are 0.8 percent lower than a year ago, while nonresidential construction input prices are 0.4 percent lower. Prices decreased in two of the three energy subcategories in November. Crude petroleum input prices were down 9.5 percent, while unprocessed energy materials prices were down 3.2 percent. Natural gas prices rose 24.1 percent.
“Construction input prices declined for the second straight month in November,” says ABC chief economist Anirban Basu. “While much of the recent decline is due to record domestic oil production, and the resulting precipitous decline in gas and diesel prices, other commodities like iron and steel and lumber products are currently more affordable than they were at the same time last year.
“Falling, or at the very least stable, input prices should help to control construction cost increases in the coming quarters,” says Basu. “This is a welcome development for an industry still dealing with extraordinarily elevated financing costs and rising labor costs due to ongoing worker shortages.”