Construction Material Prices Largely a ‘Nonissue’ for Contractors
As 2019 comes to a close, contractors are enjoying the ongoing decline in construction input prices, which decreased half of a percent in November. According to Associated Builders and Contractors (ABC) and their chief economist, Anirban Basu, material prices are "a nonissue" for contractors, despite trade disputes and tariffs.
ABC reported not only a month-over-month (MoM) decrease in material prices, but also a year-over-year (YOY) drop of 1.1%. Nonresidential construction input prices accounted for the bulk of the changes last month and last year, decreasing 0.4% and 1%, respectively. The more significant MoM declines included steel mill products, plumbing fixtures and fittings and concrete products. Even more material prices decreased YOY—natural gas, iron and steel, steel mill products and unprocessed energy materials among them.
"Even items impacted by tariffs, like steel, have fallen in price over the past year," Basu said in the report. "For instance, the price of steel mill products has declined 15.1% compared to the same time last year. … Given ongoing trade disputes, sluggish growth in Europe and many other parts of the world and expectations for a sturdy U.S. dollar, it is likely that downward pressure on materials prices will remain in place."
Notable material price increases MoM included natural gas, unprocessed energy materials and crude petroleum, while softwood lumber, concrete products and plumbing fixtures and fittings increased YOY.
—Andrew Michaels, editorial associate