The average price of commonly used construction materials rose by 0.3 percent in September and was 7.4 percent higher than it was the same month a year ago.
The Associated Builders and Contractors trade group reported on Monday that the average price of eight construction inputs increased in September, while that for another two inputs declined and that for still another remained unchanged. Drawing on data from the U.S. Bureau of Labor Statistics, the ABC found the biggest increases were for crude petroleum (up by 8.7 percent from August to September) and unprocessed energy materials (up by 4.7 percent).
The average price of softwood lumber was down by 0.4 percent in September, but the cost of that material is still up by 5.4 percent year-over-year.
“With the U.S. construction industry remaining active, as demonstrated by recent patterns in hiring, demand for materials domestically remains strong,” said Anirban Basu, ABC chief economist. “Moreover, a combination of global economic growth and geopolitical intrigue has helped to push certain commodity prices higher, including crude oil, which is up 47 percent year-over-year, and natural gas.”
Over the year-long period from September 2017 to September 2018, only one commonly used construction material showed a cost decrease. The average price of natural gas was down by 4.4 percent year-over-year. Meanwhile, big increases were seen in the average price of crude petroleum (up by 47.1 percent), unprocessed energy materials (18.3 percent), steel-mill products (18.1 percent) and iron and steel (up 12.2 percent.)
“Nonresidential contractors should continue to expect both rising material and human capital costs going forward,” Basu said. “Understanding these dynamics is, of course, particularly salient to the daily lives of estimators, who arguably have today’s most difficult construction job.”Follow @TDR_WLJDan