US Construction Materials Prices Moderate in April

On Thursday, Associated Building and Contractors (ABC), a national construction industry trade association with more than 23,000 members, released its analysis of the US Bureau of Labor Statistics’ Producer Price Index (PPI) for April. Construction input prices declined 0.1% month-over-month. Nonresidential construction input prices increased 0.2%.

Overall construction input prices are 0.1% higher year-over-year, while nonresidential construction input prices are 0.2% higher.

Prices decreased in all three energy categories last month. Natural gas prices were down 7.1%, while prices for unprocessed energy materials and crude petroleum were down 5.0% and 4.9%, respectively.

Commenting on the report, ABC Chief Economist Anirban Basu said:

“Construction input prices declined in April, but that was largely due to falling energy prices. Materials directly affected by tariffs saw sharp price increases for the month. Steel mill product prices, for instance, rose 5.9%, while copper wire and cable prices increased 5.0%.

While recent developments have reduced tariff-related uncertainty, the 25% tax on steel and aluminum imports remains in place, and a sudden resumption in imports from China could cause an increase in shipping prices. Despite the upward pressure that these factors will put on input prices, just 1 in 4 contractors expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index.”