Residential Real Estate News
Lower Energy Costs Drive Lower U.S. Construction Input Prices in September
According to new analysis by the Associated Builders and Contractors based on data from the U.S. Bureau of Labor Statistics' Producer Price Index, U.S. construction input prices fell by 0.9% in September 2024 compared to the previous month, Nonresidential construction input prices also dropped by 0.9% during the same period.
Two of the three energy subcategories saw price declines last month, with crude petroleum prices down 16.7% and unprocessed energy materials down 12.6%. However, natural gas prices rose by 2.4% in September. Overall, construction input prices are 1.9% lower compared to a year ago, while nonresidential construction input prices have decreased by 2.1%.
"The drop in construction input costs in September was largely driven by a sharp decline in oil prices," said ABC Chief Economist Anirban Basu. "However, materials like gypsum, fabricated structural metal products, asphalt, and lumber saw significant price increases during the month. While domestic freight rates remain low by historical standards, rising global container-shipping costs and emerging supply chain disruptions could drive material prices higher in the months ahead. This is a concern for contractors, many of whom expect shrinking profit margins over the next six months, as reflected in ABC's Construction Confidence Index."
