ConDig (12-May-17).  Construction material prices nudged up 0.7% in April from the month prior, which was the fifth consecutive month of price hikes, according to analysis of US Bureau of Labor Statistics data by Associated Builders and Contractors (ABC).

Material prices are also up 4.3% on the same period last year, with non-residential construction input prices also increasing by 0.7% on a monthly basis and 4.2% from a year-ago.

The rise was driven by sharp increases in natural gas and crude petroleum prices, surging 25.1% and 15.7%, respectively from the month prior in April.

Softwood lumber, which is currently at the center of a trade dispute between the US and Canada, also jumped 3% from the month before and was 13.3% up a year ago, while nonferrous wire and cable rose 1% and concrete products edged 0.8% higher.

Fabricated structural metal products and iron and steel prices were the only prices to drop in April, falling 0.4% and 0.6% respectively.

“The price increases from today’s report reinforce the recent growth in compensation costs, which means that the most advantageous period for purchasers of construction services is now well behind us,” said ABC chief economist Anirban Basu.

“Today’s PPI report is particularly significant because it indicates that inflationary pressures continue to build within the US economy.

Some analysts are forecasting the Federal Reserve to raise short-term interest rates next month, but Basu said that long-term rates remained low and this supports construction activity by limiting the borrowing cost increases sustained by purchasers of construction services.

“However, if the data continue to indicate growing inflationary pressures, lenders will be induced to raise rates, which could impact developer’s plans and compromise asset values. None of that is good for construction, all things being equal,” he added.