Dive Brief:
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It cost more to complete a construction project in May than in April, but prices of building materials are lower than they were a year ago, according to the Associated Builders and Contractors.
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Prices for construction supplies rose 1.1% in May, the largest monthly increase in two years and the third time in 10 months with a bump in prices, the ABC reported. The rising price of oil accounted for most of May’s higher costs.
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In fact, prices rose for only three key construction materials. According to the ABC, crude petroleum prices grew 15.6% in May, but are 42% lower than in May 2014; crude energy materials prices spiked 7.7% in May, but are 37.3% lower than last year; and nonferrous wire and cable prices bumped up by 0.9% last month, but dropped 2.8% since last May. Meanwhile, prices dipped slightly or remained flat last month for other key inputs, including fabricated structural metal, natural gas, plumbing fixtures, asphalt, iron and steel, softwood lumber and concrete.
Dive Insight:
ABC Chief Economist Anirban Basu said the price increases are not the beginning of a trend toward higher construction costs.
In fact, he predicted that as the U.S. dollar advances against other major currencies and interest rates rise, further increases in commodity prices — including energy — will be suppressed.
