Dive Brief:
- Construction material prices rose 0.3% in February, marking three consecutive months of growth, according to an Associated Builders and Contractors analysis of Bureau of Labor Statistics data released Tuesday.
- Material prices year-over-year rose 4.8% — the largest annual increase in more than five years.
- While energy prices have played a key role in overall price gains throughout the year, prices declined in four categories month-to-month. Natural gas dipped 18% in February, but prices are still up 66% from the year-ago mark. Unprocessed energy materials slipped 4.3%, while crude petroleum prices notched up 8% in February.
Dive Insight:
Construction material prices continue to rise in response to inflation rippling through the economy, according to ABC Chief Economist Anirban Basu. Still, Basu said global prices are beginning to steady on the back of a more stable global economy, which should ease contractors' worries about substantial future increases in input prices.
Despite the potential for relief in price hikes, Basu noted that Donald Trump's presidency and his administration's proposed $1 trillion infrastructure plan could play a part in lifting concrete and other material prices if the plan goes through. Regardless of Trump's infrastructure plan, industry observers say the rising cost of doing business, along with the skilled labor shortage and limited inventory, could be a drag on firms' abilities to maintain their margins.
