Residential Real Estate News
Construction Input Prices Continue to Rise in October
Construction input prices rose by 0.3% in October 2024 compared to the previous month, according to an analysis by Associated Builders and Contractors of Producer Price Index data from the U.S. Bureau of Labor Statistics, released today. Nonresidential construction input prices similarly rose by 0.3% for the month.
In October, all three energy subcategories saw price increases. Natural gas prices surged by 29.3%, unprocessed energy materials increased by 9.9%, and crude petroleum rose by 7.3%. Despite these monthly increases, overall construction input prices are down 0.2% compared to a year ago, while nonresidential construction input prices are 0.5% lower.
"The rise in construction input prices in October was largely driven by higher energy prices," noted ABC Chief Economist Anirban Basu. "Although prices for some other materials, like concrete and copper products, also increased during the month, overall input costs remain below where they were a year ago and have declined 5% since reaching a peak in June 2022."
"As we look ahead to 2025, it's uncertain whether prices will continue to stay stable," Basu added. "The next administration's trade policies bring further unpredictability to construction material costs. Potential tariffs could push input prices higher if purchasers preemptively import materials before such policies are implemented. As of October, contractors anticipated profit margin growth through the first quarter of 2025, according to ABC's Construction Confidence Index. That portion of the index will be closely monitored as trade policies evolve in the coming months."
