An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices increased 0.3% from April to May, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 0.6%.
Nonresidential construction material prices increased 0.3% from April to May and increased 1.1% compared with one year ago.
“There are many factors that have helped to limit materials price increases, including a weakening global economy and the emergence of goods-producing nations like Vietnam and Indonesia,” says ABC Chief Economist Anirban Basu. “A strong U.S. dollar has also helped to limit the commodity price increases encountered by America’s construction firms.
“For contractors, this comes as good news,” Basu continues. “While U.S. construction firms will continue to wrestle with rising compensation costs, materials prices are likely to remain well-behaved over the near term. There is little evidence that the global economy is reaccelerating. Moreover, the Trump administration recently removed tariffs on steel and aluminum with respect to Canada and Mexico. Finally, while public construction spending growth has been robust of late, there is some evidence that spending growth has become less intense in a number of private construction segments, which would have the effect of limiting demand for certain materials, all things being equal.”