An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices fell 0.5% from October to November, according to www.abc.org. On a year-over-year basis, the price of construction materials decreased 1.1%.
Nonresidential construction material prices decreased 0.4% from October to November and decreased 1% compared with one year ago.
“As predicted, construction materials prices largely remain a nonissue for many contractors,” says ABC Chief Economist Anirban Basu. “Certain inputs continue to rise in price, including concrete, which is up 3% for the year, but many were down on a year-over-year basis and several were down or unchanged for the month. While the concrete that is used for domestic construction is produced virtually exclusively by American enterprises, other materials are susceptible to global economic forces. With the international economy remaining soft, those commodity prices have been flat to declining.
“Even items impacted by tariffs, like steel, have fallen in price over the past year,” Basu continues. “For instance, the price of steel mill products has declined 15.1% compared to the same time last year.”
Basu says construction material prices likely will continue to decrease.
“Given ongoing trade disputes, sluggish growth in Europe and many other parts of the world and expectations for a sturdy U.S. dollar, it is likely that downward pressure on materials prices will remain in place,” Basu says. “If that forecast proves accurate, it will help offset some of the impact of rising compensation costs in the U.S. nonresidential sector, a reflection of ongoing construction spending and a 50-year low in national unemployment. Were it not for sluggish materials prices, the cost of delivering construction services in America would be rising even an even faster rate.”
