Year-over-year construction input prices declined for a third straight month in May and fell 0.6% from April, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released June 14.
Overall May construction input prices were 3.7% lower than a year earlier, ABC noted, with nonresidential construction input prices down 3.4% and down 0.5% from April.
Prices fell in all three energy subcategories month-to-month, ABC said, with Crude petroleum down 10.2% in May; unprocessed energy materials were down 7.8%; and natural gas prices down 2.0% for the month.
“The headline numbers suggest broad-based deflation in construction materials prices,” ABC Chief Economist Anirban Basu in a news release. “But the declines in input prices are less broad than meets the eye. Much of the deflation is tied to energy, steel and softwood lumber. Beyond those spheres, there is plenty of input price inflation.”
Basu added that May concrete prices increased 1.1% for the month and more than 12% year-over-year, while the price of construction machinery and equipment rose marginally month-to-month and were up more than 9% from a year earlier. Meanwhile, May prices for brick and structural clay tile as well as adhesives and sealants were up more than 9% year-over-year.
“In short, there are still supply chain challenges, but a weakening global economy has helped place downward pressure on several traded commodities,” Basu added. “With so many public and private megaprojects under development in the United States, it is likely that many input price categories will continue to show inflationary tendencies even if the overall economy dips into recession.”
ABC’s report coincides with the Bureau’s overall report that showed overall May producer prices increased 1.1% year-over-year on an unadjusted final demand basis — its smallest increase in more than two years. Lower prices in energy and food led to a smaller overall increase than expected.