Construction Materials Prices Tame in April Despite Rising Iron and Steel Costs

Construction input prices decreased 0.1% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices increased 0.2% for the month.

Overall construction input prices are 0.1% higher than a year ago, while nonresidential construction input prices are 0.2% higher. Prices decreased in all three energy categories last month. Natural gas prices were down 7.1%, while prices for unprocessed energy materials and crude petroleum were down 5.0% and 4.9%, respectively.

“Construction input prices declined in April, but that was largely due to falling energy prices,” said ABC Chief Economist Anirban Basu. “Materials directly affected by tariffs saw sharp price increases for the month. Steel mill product prices, for instance, rose 5.9%, while copper wire and cable prices increased 5.0%.

“While recent developments have reduced tariff-related uncertainty, the 25% tax on steel and aluminum imports remains in place, and a sudden resumption in imports from China could cause an increase in shipping prices. Despite the upward pressure that these factors will put on input prices, just 1 in 4 contractors expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index.”