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Led by Energy, Construction Materials Prices Surge in April

ABC Chief Economist Anirban Basu
ABC Chief Economist Anirban Basu
Construction input prices increased 0.5 percent in April 2024 compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices increased 0.6 percent for the month.

Overall construction input prices are 2.3 percent higher than a year ago, while nonresidential construction input prices are 2.2 percent higher. Prices increased in two of the three energy subcategories last month. Crude petroleum prices were up 10.6 percent, while unprocessed energy materials prices increased 8.2 percent. Natural gas prices were down slightly by 0.9 percent.

“Construction input prices jumped half a percentage point higher in April and have increased 3.5 percent over the first four months of the year,” said ABC Chief Economist Anirban Basu. “While iron, steel, asphalt, and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when nearly one in four contractors expect their margins to contract over the next two quarters, according to ABC’s Construction Confidence Index.”

Basu also added, “Perhaps more importantly for contractors, the overall Producer Price Index reading for final demand goods and services increased 0.5 percent in April. This is yet another sign that inflation is accelerating and suggests that interest rates are set to stay higher for longer.”

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