Construction material prices decreased 0.9% in November and are up 11.9% on a year-over-year basis, according to www.abc.org.
Nonresidential construction material prices fell 0.8% from October to November and increased 11.5% compared with one year ago. Prices were up in only four of 11 subcategories. Softwood lumber prices are down 3.9% year-over-year and down 0.9% from October to November. Iron and steel prices are down 23.9% year-over-year and 2.4% for the month. Natural gas fell 15.8% from October to November and is up 178.6% since February 2020. Crude petroleum fell 2.3% for the month and is up 77.9% since February 2020.
“The decline in wholesale prices for many construction inputs is generally positive news,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Increasingly, we are receiving news that construction input inflation has peaked as supply chains continue to normalize despite a range of geopolitical stressors. In November, much of the relief emerged from lower energy prices. According to ABC’s Construction Confidence Index, contractors are already expecting growth in sales and employment levels over the next six months; this report will do little to curb that optimism.
“As always, there is more to this report than meets the eye,” Basu continued. “Prices for various economic services grew faster than expected, a reflection of a still very strong labor market associated with substantial compensation growth. Therefore, while supply chains may be improving, helping to moderate the price of physical inputs, contractors will continue to face elevated and rising human capital costs. This may explain why just as many contractors expect profit margins to decline over the next six months as expect them to expand.”