- Construction material prices rose 0.9% between Feburary and March, but fell 3.4% year-over-year, according to an Associated Builders and Contractors analysis of Bureau of Labor Statistics data released Wednesday.
- March marked the first time in nine months that construction industry inputs in the Producer Price Index increased.
- Only four of 11 input prices dipped between February and March: prepared asphalt, natural gas, fabricated structural metal, and plumbing fixtures and fittings. The remaining seven inputs saw price gains last month.
ABC Chief Economist Anirban Basu attributed last month’s rise to the “rather profound percentage gain in oil prices,” which grew 40.7% between February and March. However, he noted that “rapid material price inflation remains unlikely going forward,” as the global economy is still moving slowly.
“There are no guarantees that meaningful production cut agreements will be reached and faithfully implemented by oil producers,” he said in a release. “While global oil production growth is likely to slow, demand will continue to be weak, implying an uncertain price trajectory.”
March’s results affirm Basu’s prediction last month of a slight rise in material prices, especially in oil. In past months with plunging prices, he said the declining energy sector was causing significant damage to the states that rely on it. Still, even with March’s price gains, builders shouldn’t be worried that major material price spikes will come anytime soon.