Construction input prices increased 0.3% in October compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices increased 0.2% for the month.
Construction input prices are up 14.6% from a year ago, while nonresidential construction input prices are 14.2% higher. On a monthly basis, input prices were up in only three of 11 subcategories.
Natural gas experienced the largest decline in prices, falling 37.8% in October. Crude petroleum prices increased 2.0%, while unprocessed energy materials prices were down 19.8%.
Petroleum prices drove most of the increase in construction input prices, said ABC Chief Economist Anirban Basu. Other categories, such as iron and steel, saw sharp declines.
“For weeks, the conventional notion has been that peak inflation is behind us,” Basu said.. “Today’s PPI report supports this and gives credence to the idea that the Federal Reserve will soon slow interest rate increases. But contractors should take a wait-and-see approach, at least until we have multiple months of data suggesting that peak inflation has in fact been achieved.”