Construction Material Prices Increased by 1% in January

Date:

According to the Associated Builders and Contractors, construction input prices increased 1.3% in January. Data from the Bureau of Labor Statistics’ Producer Price Index. Input prices for nonresidential construction rose 1.1% month on month.

Overall, building input prices are up 4.9% year on year, the smallest yearly increase since January 2021. Input prices for nonresidential building have risen 4.9% since January 2022.

“Recent employment and retail sales reports indicate that the economy is not slowing nearly as quickly as predicted,” Anirban Basu, ABC Chief Economist, stated. “That is the good news. The bad news is that the economy remains overheated, a phenomenon neatly reflected in the January PPI data, which indicated that construction input price gains accelerated on a monthly basis. For instance, construction machinery and equipment prices expanded 3.4% in January and are up more than 12% during the past year.

“The implication is that the Federal Reserve will maintain higher interest rates longer,” said Basu. “Ironically, it is the current strength of the economy that makes a recession more likely sometime during the next 12 months. At some point, higher interest rates will meaningfully affect economic activity. With industry backlog high, according to ABC’s Construction Backlog Indicator, many nonresidential contractors will feel little to no effect from higher interest rates in 2023. But in certain construction segments and locations, these dynamics could make the next two years more challenging.”


Amazing Builder Partners



Chris Gordon
Chris Gordon
Chris is our Texas contributor covering building products and home renovation.

Popular

Share post:

More like this
Related

Consumers’ Confidence Stalled Despite Concerns about the Future

This pessimism was mostly caused by ongoing inflation, particularly...

The MITER Foundation raises over $4M for charity

In late September and early October, the MITER Foundation,...

Northern Tool + Equipment opens new store in Bossier City

Northern Tool + Equipment announced the opening of a...

Builders’ General Supply Company’s Jimmy Porcelli retires after 45 years

After 45 years of service, James "Jimmy" Porcelli retired...

NAR: Existing home sales increased in January 2024

Following a cycle low in December, existing house sales...

Rental Focus in Multifamily Development Shows Slight Decline

According to NAHB's study of quarterly Census data, the...

Hillhouse Condos Announces the Pre-sale of Luxury Units on Lake Tuscaloosa, with a July 2024 Completion Date

Hillhouse Condos is excited to announce the pre-sale of...

Existing Home Sales Plunge to 13-Year Low as Mortgage Rates Surge

According to the National Association of Realtors, existing home...

Beacon Opens New Location in West Bend, Wisconsin

Beacon has launched a new branch in West Bend,...

Missing Middle Construction Stalled Since Great Recession

The missing middle construction sector comprises the development of...

Beacon adds two more locations in Texas

Beacon has expanded its operations across Texas to 32...

Inflation Remains High as Housing Costs Continue to Rise

Despite a slowing in year-over-year growth, shelter costs continue...

Sherwin-Williams Introduces Anthology for Colormix Forecast 2024

Sherwin-Williams has launched a new biannual approach to the...

Thermal Tech, Inc. Acquired by ABC Supply

Thermal Tech, Inc., a siding distribution company in Kalispell,...

Lugbill Supply Center celebrates grand reopening event

On September 23, Lugbill Supply Center in Archbold, Ohio,...

RoyOMartin invests $9.5M to modernize manufacturing facility in Louisiana

Martco, LLC, the parent company of RoyOMartin, a third-generation,...