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News Nov. 17, 2022

Construction material prices rose slightly in October

Construction material prices increased 0.3% in October and are up 14.6% on a year-over-year basis, according to 

Nonresidential construction material prices rose 0.2% from September to October and increased 14.2% compared with one year ago. Prices were up in only three of 11 subcategories. Softwood lumber prices are up 4.4% year-over-year and down 1.8% from September to October. Iron and steel prices are down 19.8% year-over-year and 5.4% for the month. Natural gas fell 37.8% from September to October and is up 253.9% since February 2020. Crude petroleum rose 2% for the month and is up 83.3% since February 2020.

“Construction input prices inched higher in October, but that was largely due to an increase in petroleum prices,” said ABC Chief Economist Anirban Basu. “Certain categories, like steel mill products and iron and steel, experienced sharp price declines for the month. This is a welcome development for contractors, as just 31% expect profit margins to rise over the next six months, according to Associated Builders and Contractors’ Construction Confidence Index.

“For weeks, the conventional notion has been that peak inflation is behind us,” Basu continued. “Today’s PPI report supports this and gives credence to the idea that the Federal Reserve will soon slow interest rate increases. But contractors should take a wait-and-see approach, at least until we have multiple months of data suggesting that peak inflation has in fact been achieved.” 


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