ConDig (09-Oct-18). US construction input prices nudged 0.6% lower in September compared with the month prior and were down 1.7% for the year-to-date, largely driven by lower energy costs, according to Associated Builders and Contractors (ABC) analysis of US Bureau of Labor Statistics data.
Nonresidential construction input prices fell 0.7% for the month and were down 1.4% compared with the same time last year.
Much of the year-over-year drop was driven by falling energy prices, as crude petroleum was down 19.2%, natural gas was down 34.6% and unprocessed energy materials 21.3% lower.
Only three of 11 key construction-related materials experienced monthly price increases in September, with softwood lumber up 2%, steel mill products 0.8% higher and plumbing fixtures and fittings increased 0.6%.
“A weakening global economy, a sturdy US dollar and revolutions in technology across much of the energy spectrum continue to contribute to deflationary price pressures in construction materials prices,” said ABC chief economist Anirban Basu.
“The expectation is that materials prices will continue to remain weak absent a major geopolitical event. Even the drone strike on Saudi Arabia’s oil facilities, which caused oil prices to spike briefly, was insufficient to place meaningful upward pressure on prices.”
Basu noted that the drop in material prices should help abate the pace at which construction service delivery costs are rising.