PRESS RELEASE
WASHINGTON, June 13—Construction input prices decreased 0.9% 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 today. Nonresidential construction input prices decreased 0.8% for the month.
Overall construction input prices are 2.1% higher than a year ago, while nonresidential construction input prices are 2.2% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices were down 8.7%, while unprocessed energy materials prices decreased 6.6%. Natural gas prices were up by 1.7%.
“For contractors, this data provides excellent news along two fronts,” said ABC Chief Economist Anirban Basu. “First, construction input prices fell for the first time since December and, despite rising somewhat sharply over the first four months of 2024, are up just 2.1% year over year. Second, the Producer Price Index’s economywide measure of final demand prices fell in May. This, along with yesterday’s cooler than expected Consumer Price Index data, signals slowing inflation and that the Federal Reserve may begin to cut rates sooner than expected.”
With contractor confidence regarding profit margins at the lowest level in seven months, according to ABC's Construction Confidence Index, falling materials prices and the prospects of lower interest rates in 2024 are welcome developments for the construction industry, added Basu.
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Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.
Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 23,000 members. Founded on the merit shop philosophy, ABC and its 67 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.