Construction input prices decreased 0.3% in November compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices decreased 0.3% for the month as well. Inputs to construction are still nearly 39% higher than at the start of the COVID-19 pandemic.
Construction sand, gravel and crushed stone prices rose 0.4% for the month; 8.4% year-over-year; and have risen 29.6% since February 2020.
Overall construction input prices are 0.8% lower than a year ago, while nonresidential construction input prices are 0.4% lower. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum input prices were down 9.5%, while unprocessed energy materials prices were down 3.2%. Natural gas prices rose 24.1% in November.
“Construction input prices declined for the second straight month in November,” said ABC Chief Economist Anirban Basu. “While much of the recent decline is due to record domestic oil production and the resulting precipitous decline in gas and diesel prices, other commodities like iron and steel and lumber products are currently more affordable than they were at the same time last year.
“Falling, or at the very least stable, input prices should help to control construction cost increases in the coming quarters,” said Basu. “This is a welcome development for an industry still dealing with extraordinarily elevated financing costs and rising labor costs due to ongoing worker shortages.”