Construction material prices fell 0.3% in June and are up 1.1% on a year-over-year basis, according to Associated Builders and Contractors. Prices in June were 39.5% higher than in February 2020.
Nonresidential construction material prices fell 0.4% from May to June and increased 0.7% compared with one year ago. Softwood lumber prices are down 7.4% year over year and 0.5% from May to June. Iron and steel prices are down 11.5% year over year and 1.7% for the month. Natural gas rose 36.3% from May to June and is up 19.4% year over year. Crude petroleum fell 0.2% for the month and is up 13.3% year over year.
“Construction materials prices dipped in June, perhaps a reflection of declining project starts in a number of construction segments and an associated dip in demand,” said ABC Chief Economist Anirban Basu. “For instance, input prices fell in the multifamily segment, where many contractors indicate substantial softening of demand for their services. The same was true of input prices in commercial construction segments.
“While ABC members continue to report stable backlog as measured by the Construction Backlog Indicator and steady confidence as measured by the Construction Confidence Index, there remain reasons for concern,” Basu continued. “While construction input prices fell last month according to today’s report, overall inflation as measured by the Producer Price Index is hotter than anticipated. The Federal Reserve is still looking for data indicating that 2% inflation will soon be reestablished, so data like these may forestall much-anticipated and desired interest rate cuts. That translates into higher interest rates for longer, which would be damaging to construction industry prospects.”
