Construction material prices held steady in July and are down 3.1% on a year-over-year basis, according to Associated Builders and Contractors. Although prices fell again year over year, they still are 38.3% higher than in February 2020.
Nonresidential construction material prices fell 0.1% from June to July and decreased 2.7% compared with one year ago. Softwood lumber prices are down 17.3% year over year and up 4.4% from June to July. Iron and steel prices are down 17.1% year over year and 6.1% for the month. Natural gas rose 11% from June to July and is up 21.8% since February 2020. Crude petroleum rose 8.4% for the month and is up 52.2% since February 2020.
“Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy,” said ABC Chief Economist Anirban Basu. “It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S. economy. As supply chains have normalized, unmet demand has been more readily satisfied. That has propelled transactional volume and economic growth. At the same time, the improved supply chain has helped push prices lower, contributing to the disinflation observable both in yesterday’s consumer price index data and today’s producer price index release.
“With the exception of energy prices, which are heavily influenced by a cocktail of geopolitics, weather and investor frenzy, construction materials prices should be reasonably stable during the months to come,” Basu continued. “One exception may be construction equipment prices. The price of equipment expanded nearly 2% on a monthly basis in July and nearly 10% over the past year. Many contractors continue to complain about lengthy lead times for equipment as the nation continues to expand spending on infrastructure.”
