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BLS: Monthly Construction Input Prices Unchanged in July

Aug. 11, 2023
Overall prices are 3.1% lower than last July. But equipment prices are still rising amid increased demand for infrastructure work, says ABC.

PRESS RELEASE 

WASHINGTON, Aug. 11 — Construction input prices were unchanged in July relative to the previous month, according to the latest U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices fell 0.1% for the month.

Overall construction input prices are 3.1% lower than a year ago, while nonresidential construction input prices are 2.7% lower. However, prices increased in all three energy subcategories. Natural gas prices were up 11.0% in July, while crude petroleum and unprocessed energy materials prices increased 8.4% and 8.0%, respectively.

“Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy,” said ABC Chief Economist Anirban Basu. “It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S. economy."

As supply chains have normalized, unmet demand has been more readily satisfied, Basu explained. That has propelled transactional volume and economic growth. At the same time, the improved supply chain has helped push prices lower, contributing to the disinflation observable both in yesterday’s consumer price index data and today’s producer price index release, he added.

“With the exception of energy prices, which are heavily influenced by a cocktail of geopolitics, weather and investor frenzy, construction materials prices should be reasonably stable during the months to come,” said Basu. “One exception may be construction equipment prices. The price of equipment expanded nearly 2% on a monthly basis in July and nearly 10% over the past year. Many contractors continue to complain about lengthy lead times for equipment as the nation continues to expand spending on infrastructure.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 22,000 members. Founded on the merit shop philosophy, ABC and its 68 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org