Construction input or material prices have dropped again, when comparing August's numbers to July, but were up nearly 17% from a year ago.
The price of materials and services used in nonresidential construction declined by 1.4% from July to August as a steep drop in fuel prices masked increases in the cost of other construction inputs, according to analysis of U.S. Bureau of Labor Statistics Producer Price Index data.
Many contractors expect to pass along cost increases to project owners during the months ahead. However, with rising borrowing costs and the risk of recession, project owners may become increasingly resistant to elevated costs for the delivery of construction services.
“The price report highlights the mixed conditions contractors are experiencing, with many costs still rising sharply while others take a breather,” said Ken Simonson, chief economist for the Associated General Contractors of America. “Meanwhile, an industry survey we recently released found that supply-chain issues and labor availability are delaying many construction projects.”
Prices of several widely used goods rose in August, partially offsetting price declines in fuel, lumber and some metal products. Natural gas prices increased 35.3%, followed by unprocessed energy materials prices, which rose 13.5%.
These increases were more than offset by one-month decreases in August in the index for diesel fuel, down 13.4%; steel mill products, down 5.7%; aluminum mill shapes, down 3.9%; and lumber and plywood, down 2.9%. Crude petroleum prices were down 5.3% in August.
The fuel price drop contributed to a 1.9% fall in the index for truck transportation of freight.
