An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices fell 4.4% from March to April, according to www.abc.org. On a year-over-year basis, the price of construction materials decreased 7.3%.
Nonresidential construction material prices fell 4.2% from March to April and decreased 7.4% compared with one year ago.
“There has been a considerable amount of chatter regarding inflationary pressures recently, given the liquidity injections implemented by the Federal Reserve and trillions of dollars of additional federal spending,” says ABC Chief Economist Anirban Basu. “While inflation may rear its ugly head as the economy recovers from the COVID-19 crisis, for now it is deflationary pressures that dominate. Global demand for energy and many other items has collapsed, placing downward pressure on aggregate price levels.
“For project owners, this may be an important reason to move forward with planned construction projects,” Basu continues. “There are cost savings to be reaped during this period as materials prices, including energy prices, falter. Moreover, initiating construction now may position projects to come online as the broader economy begins to recover in earnest.”
