Courtesy of Associated Builders and Contractors

WASHINGTON, D.C. – Construction input prices increased 2.6 percent in May compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released June 11. Nonresidential construction input prices increased 2.4 percent for the month.

Overall construction materials prices are 9.6 percent higher than one year ago, while nonresidential construction input prices are 9.7 percent higher. Prices increased in two of the three energy subcategories last month. Crude petroleum prices increased 11.8 percent and unprocessed energy materials increased 6.9 percent. Natural gas prices were down 18.2 percent in May.

“Construction input prices surged again in May and are now up nearly 10 percent 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.”