BLS: Construction Materials Prices Surged in May
Key Highlights
- Construction input prices increased by 2.6% in May, driven by higher energy costs, and multiple tariffs;
- Energy subcategories saw price increases, with crude petroleum up 11.8% and unprocessed energy materials up 6.9%;
- Overall construction materials prices are 9.6% higher than last year, impacting project budgets.
- Industry experts express concern over rising tariffs and high borrowing costs affecting future profitability.
WASHINGTON, June 11 — Construction input prices increased 2.6% in May compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics (BLS) Producer Price Index (PPI) data released today. Nonresidential construction input prices increased 2.4% for the month.
Overall construction materials prices are 9.6% higher than one year ago, while nonresidential construction input prices are 9.7% higher. Prices increased in two of the three energy subcategories last month. Crude petroleum prices increased 11.8% and unprocessed energy materials increased 6.9%. Natural gas prices were down 18.2% in May.
“Construction input prices surged again in May and are now up nearly 10% year over year,” said ABC Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper. Contractors remain optimistic that their profit margins will expand over the next six months, according to ABC’s Construction Confidence Index, yet it appears likely that materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability.”
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 with 67 chapters and 24,000 members. Founded on the merit shop philosophy, ABC helps members offer a robust employee value proposition, 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.
|
### |
|
|