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Dive Brief:
- Construction input prices remained unchanged in November, with prices for nonresidential construction inputs rising just 0.1% over the past month, according to an analysis by Associated Builders and Contractors.
- While overall input prices are about 0.5% higher than a year ago, some materials continue to see significant increases, the report said.
- The flat monthly input prices come amid reacceleration in inflation in the broader economy, as the consumer price index rose 2.7 percent for the year, said Anirban Basu, an economist at head of ABC While that’s above the Federal Reserve’s 2 percent inflation target, he added that contractors remain optimistic about the next six months, with more than 60 percent expecting sales growth.
Diving knowledge:
The lack of change suggests continued stability in overall construction input prices, but a closer look reveals mixed pressures for contractors, Basu said.
For example, much of this price stabilization comes from a reduction in energy costs, as opposed to specific building materials. Natural gas prices fell 17.3% year over year and unprocessed energy materials fell 11.9% over the same period.
“Construction input prices have increased by just 0.2% in the first 11 months of 2024,” Basu said in the statement. “However, this encouraging year-to-date price growth mainly reflects the decline in energy prices and masks the price escalation that has occurred for specific materials. Wire prices and copper and softwood cables, for example, are up nearly 12% year-on-year.”
Costs for copper and brass mill shapes rose about 15 percent over the past year, while aluminum mill shapes rose 7.4 percent, said Macrina Wilkins, an analyst at ‘senior research from the Associated General Contractors of America, in an email to Construction Dive. These increases are in line with the broader increases that Basu noted.
“While overall input prices have performed well, yesterday’s release of the consumer price index indicated that economy-wide inflation reaccelerated in November,” Basu said . “The recent upturn suggests that inflation may be more stubborn than previously expected.”
