Dive Brief:
- Construction material prices slipped 0.2% between September and October and fell 4.6% year-over-year, according to an Associated Builders and Contractors analysis of Bureau of Statistics data released Friday.
- October marked the fourth consecutive month of declines for construction industry inputs in the Producer Price Index.
- The index is currently at its lowest point since the first quarter of 2011. Nine of 11 key input prices were down in October on a year-over-year basis.
Dive Insight:
ABC Chief Economist Anirban Basu attributed the continued decline in material prices to the strong value of the dollar and "weaker than anticipated performance in key emerging markets," such as China, Russia and Brazil.
He added that he expects November to experience further declines, unless these economic factors see a sudden shift.
Six key inputs rose between September and October: crude petroleum, crude energy materials, softwood lumber, fabricated structural metal product, plumbing fixtures and fittings, and nonferrous wire and cables. Concrete product remained unchanged, and the remaining four inputs fell in October.
Despite possible negative implications about the global economy, the lower material prices could signal good news for builders looking to capitalize on the cheaper commodities during a construction boom across the U.S.
