�山ǿ��

High-rise construction in New York City, New York, US. (Image: Adobe Stock)

Industry input prices decreased 0.9% from April to May of this year, said ABC, which analysed data from the US Bureau of Labor Statistics’ Producer Price Index.

For the non-residential sector, input prises decreased 0.8%.

The fall in prices comes after they were ‘rising sharply’ over the year’s first four months, ABC said. Last month, price fell in two of three energy categories – crude petroleum (-8.7%) and unprocessed energy materials (-6.6%), while natural gas price rose modestly (1.7%).

“For contractors, this data provides excellent news along two fronts,” said ABC chief economist Anirban Basu. “First, construction input prices fell for the first time since December and, despite rising somewhat sharply over the first four months of 2024, are up just 2.1% year over year.

“Second, the Producer Price Index’s economywide measure of final demand prices fell in May. This, along with yesterday’s cooler than expected Consumer Price Index data, signals slowing inflation and that the Federal Reserve may begin to cut rates sooner than expected.”

US construction backlog down but confidence remains high

Backlog figures dipped slightly, ABC noted, with the biggest one-month dip (-1.8) in the infrastructure category.

Still, contractor confidence remains elevated, as sales, profit margin, and staffing expectations remained consistent dating back to May of last year. The biggest dip was on profit margin expectations, which hit their lowest figure since November 2023.

“While significant spending activity in manufacturing and infrastructure-related segments has kept contractors busy, input cost escalation has reemerged in recent months,” added Basu, referring to 2024’s consecutive months of material price increases.

Looking back 12 months, the Northeast and West regions are down a full point on ABC’s backlog indicator.

“Over a year has passed since the Federal Reserve raised the target range of the federal funds rate above 5%,” said Basu. “Despite widespread expectations that rates will remain elevated through at least the end of the year, contractors remain confident about the future, with a majority of contractors expecting their sales and staffing levels to expand over the next six months.”

Material prices are still historically high compared to 2020

While the easing of input prices and hopes for rate cuts are a positive for the industry, inputs on the Producer Price Index are still up to 50% higher than in 2020, in some cases.

On the whole, inputs to construction are up 41% since February 2020, 41.6% in non-residential construction, and 42% in commercial construction.

Commodity prices across the board are also historically high, with copper wire/cable up 53.7% since February 2020, crude petroleum up 57.9%, fabricated structural metal products up 54%, and steel mill products (with the highest price increase percentage) at 59.7%.

Only natural gas prices have fallen (-13.6%) since 2020 among the 20 commodities analysed by ABC. Softwood lumber rose 8.3% since February 2020, which was the only commodity of the remaining 19 not to see a double-digit rise.