Construction material prices fell 0.6% in December 2023 and are up 1.2% on a year-over-year basis, according to Associated Builders and Contractors. Prices in December 2023 were 37.5% higher than in February 2020.
Nonresidential construction material prices fell 0.4% from November 2023 to December 2023 and increased 1.6% compared with one year ago. Softwood lumber prices are down 14.6% year over year and up 0.2% from November 2023 to December 2023. Iron and steel prices are up 1.9% year over year and 4.3% for the month. Natural gas rose 1.5% from November 2023 to December 2023 and is down 60.5% year over year. Crude petroleum fell 13.2% for the month and is down 10.8% year over year.
“Construction input prices fell sharply in December,” said ABC Chief Economist Anirban Basu. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year during which aggregate input prices increased just 1.2% and many individual commodity prices actually fell.
“Despite continued materials price moderation and other positive developments regarding inflation, the outlook is not without risks,” Basu continued. “Piracy in the Red Sea and the resulting diversion of ships from the Suez Canal around the Cape of Good Hope has caused global freight rates to nearly double in the first two weeks of 2024, according to the Freightos Baltic Index. All else equal, rising shipping costs will put upward pressure on certain inputs.”
