Construction material prices rise in August

An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 0.6% from July to August, according to www.abc.org. On a year-over-year basis, the price of construction materials decreased 0.9%.

Nonresidential construction material prices rose 0.3% from July to August and decreased 1.2% compared with one year ago.

“Inflation has been coming in a bit hotter than anticipated, which gives contractors cause for concern,” said ABC Chief Economist Anirban Basu. “Other challenges include inducing workers to return to job sites and reduced demand for nonresidential construction services due to compromised commercial real estate conditions and weak state and local government finances. Recent data stand for the proposition that higher inflation and interest rates also represent future risk factors for contractors.

“A number of factors have triggered a pickup in inflation,” Basu continued. “One is a weakening U.S. dollar, resulting from the lingering pandemic, as well as Federal Reserve policy and pronouncements. The Federal Reserve’s injections of liquidity into financial systems are also consistent with stepped-up inflation expectations. The federal government will run an estimated $3.3 trillion budget deficit during the current fiscal year, which would also tend toward more inflationary pressures and eventual higher interest rates. Finally, the economic recovery to date has been robust, with the U.S. economy adding millions of jobs and recently driving unemployment well below 10%, meaningfully ahead of schedule based on consensus forecasts.”

Date : Jan. 01, 0001

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