Piles driven at 1005 N. Edison St. for The Edison, a planned 32-story mass timber tower in Milwaukee. Construction input prices are 1.1% higher than a year ago, according to an Associated Builders and Contractors analysis.

Construction input prices in June were slightly lower than the previous month, according to a trade association report.

Input prices fell 0.3% in June compared to May, an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data showed. The mid-July analysis reported that nonresidential construction input prices fell 0.4% for the month.

Overall construction input prices are 1.1% higher than they were a year ago, and nonresidential construction input prices are 0.7% higher, according to the report. Natural gas prices shot up 36.3% over one month, while the aggregate price of unprocessed energy materials was up 4.7%. Crude petroleum prices were down 0.2%, the report added.

“Construction materials prices dipped in June, perhaps a reflection of declining project starts in a number of construction segments and an associated dip in demand,” said Anirban Basu, the chief economist of ABC, in a statement. “For instance, input prices fell in the multifamily segment, where many contractors indicate substantial softening of demand for their services. The same was true of input prices on commercial construction segments,” he added.

In a previous report, ABC members reported stable backlog and steady confidence in both of the association’s indicators. However, Basu said there were still reasons for concern.

“While construction input prices fell last month according to today’s report, overall inflation as measured by the Producer Price Index is hotter than anticipated,” Basu said. “The Federal Reserve is still looking for data indicating that 2% inflation will soon be reestablished, so data like these may forestall much-anticipated and desired interest rate cuts. That translates into higher interest rates for longer, which would be damaging to construction industry prospects,” he added.

On July 9, ABC reported its backlog indicator increased to 8.4 months in June. The reading was down 0.5 months from June 2023.

Source: finance-commerce.com