Construction material prices decreased 0.6% in May and are down 3.7% on a year-over-year basis, according to Associated Builders and Contractors. Although prices fell again year over year, they still are 38.2% higher than in February 2020.
Nonresidential construction material prices fell 0.5% from April to May and decreased 3.4% compared with one year ago. Softwood lumber prices are down 40.4% year over year and 0.3% from April to May. Iron and steel prices are down 16.8% year over year and up 1.7% for the month. Natural gas fell 2% from April to May and is up 17.9% since February 2020. Crude petroleum fell 10.2% for the month and is up 47.2% since February 2020.
“The headline numbers suggest broad-based deflation in construction materials prices,” said ABC Chief Economist Anirban Basu. “But the declines in input prices are less broad than meets the eye. Much of the deflation is tied to energy, steel and softwood lumber.
“Beyond those spheres, there is plenty of input price inflation,” Basu continued. “For instance, concrete prices increased 1.1% for the month and more than 12% for the year. The price of construction machinery and equipment rose marginally for the month and is up more than 9% over the past year. Prices for brick and structural clay tile as well as adhesives and sealants are also up more than 9% over the past 12 months. In short, there are still supply chain challenges, but a weakening global economy has helped place downward pressure on several traded commodities. With so many public and private megaprojects under development in the U.S., it is likely that many input price categories will continue to show inflationary tendencies even if the overall economy dips into recession.”
