An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 0.3% from December 2019 to January, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 1.9%.
Nonresidential construction material prices remained unchanged from December 2019 to January and increased 1.8% compared with one year ago.
“As predicted, construction materials prices are rising only gradually in the aggregate and have actually decreased in a number of categories,” says ABC Chief Economist Anirban Basu. “America’s shale revolution has kept both oil and natural gas prices low, even in the midst of ongoing global tumult. Natural gas prices have declined by more than 40% over the past year.
“The coronavirus outbreak is likely decreasing the demand for raw materials since so many supply chains have been interrupted,” Basu continues. “While that should conspire to drive prices lower in a number of categories during the weeks ahead, there may be certain construction components that inflate in price due to those very same supply chain interruptions. Nonetheless, contractors are not likely to face widespread surges in materials prices anytime soon. With a healthy 8.4 months of work under contract but not yet performed, according to ABC’s latest Construction Backlog Indicator, this is a favorable trend.”
