ConDig (11-Aug-22). US construction input prices fell 1.8% in August compared with the month prior, according to the Associated Builders and Contractors (ABC).
The association also reported that nonresidential construction input prices also dropped 1.8% for August.
Input prices were down in eight of 11 subcategories on a monthly basis. Prices in all three energy subcategories fell in July, with natural gas prices falling 27.6%, the largest decrease. Unprocessed energy materials prices were down 21.2%, while crude petroleum prices fell 19.1%.
Iron and steel prices crumbled 4.4%, still mill products were 3.7% lower and nonferrous wire and cable prices were 3.2% down month-on-month.
Plumbing and fixtures, however, rose 0.8% and softwood lumber prices were up 0.8%.
Despite the month-on-month decrease, construction input prices are up 17.4% from a year ago, while nonresidential construction input prices are 17.3% higher.
“Today’s Producer Price Index data supplies additional evidence that inflation has peaked,” said ABC chief economist Anirban Basu.
“A weakening global economy and ongoing supply chain adjustments have resulted in significant declines in the prices of a number of key commodities, ranging from oil to steel.”
He added that while the risk of recession remains elevated, recent government reports on consumer and producer prices make it more likely that the Federal Reserve will be able to engineer a soft landing.
“For contractors who have seen their profit margins diminished by elevated materials prices, a trend confirmed by ABC’s Construction Confidence Index, this is a welcome development,” Basu said.