Construction input prices remained unchanged in July compared to the previous month, based on data from the U.S. Bureau of Labor Statistics Producer Price Index. A closer look reveals that nonresidential construction input prices experienced a slight decline of 0.1% during the same period.

In a year-over-year context, overall construction input prices are 3.1% lower, with nonresidential construction input prices following suit at a 2.7% decrease. Notably, the prices within all three energy subcategories saw an increase: natural gas prices surged by 11.0% in July, while crude petroleum and unprocessed energy materials prices rose by 8.4% and 8.0% respectively.

ABC Chief Economist Anirban Basu observed that stagnant goods prices can be attributed to enhanced supply chains and a sluggish global economy. The normalization of supply chains has led to better economic outcomes and the satisfaction of unmet demand, which has in turn boosted economic growth and transactional volume. This normalization has also contributed to lower prices, supporting the recent trend of disinflation seen in consumer price index data as well as the producer price index release.

With the exception of energy prices, which are influenced by various factors including geopolitics and weather, construction materials prices are expected to remain relatively stable in the coming months. An exception may be observed in construction equipment prices, which saw a notable expansion of nearly 2% on a monthly basis in July and almost 10% over the past year. Contractors have reported extended lead times for equipment acquisition, likely due to increased infrastructure spending across the nation.

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