Diadon Enterprises © 2018

Construction input prices fall for second straight month | Dump Trucks Charlotte NC

An article fromsite logo
Published Sept. 15, 2022
Joe Bousquin's headshot
Senior Reporter
Lumber supplies sit on shelves in a construction supply store.
Lumber prices dropped 3.1% in August, another sign of easing inflation pressure. kali9/E+ via Getty Images

Columbus Ohio Dump Truck Company Brief:

  • Nonresidential construction input prices dipped for a second consecutive month in August, providing more evidence that construction material costs peaked in June and supporting newfound optimism in the sector.  
  • Prices for steel mill products, crude petroleum and softwood lumber were down 5.7%, 5.3% and 3.1%, respectively, for the month, while cost for all nonresidential supplies moderated 1.4%, according to an Associated Builders and Contractors analysis of Bureau of Labor Statistics producer price index data. 
  • That builds on momentum from July, when nonresidential input prices fell 1.8% after rising by the same amount in June. For the year, however, the prices for products that go into nonresidential structures and other construction projects are still up 16.7%, ABC said. 

Dump Trucks Columbus OH Insight:

The news built on muted optimism that the sector may be able to avoid the full brunt of a recession, even if the broader economy experiences further contraction in the third quarter. 

“Today's Producer Price Index report supplies additional evidence that wholesale inflation is edging lower from the highs observed earlier this year,” said Anirban Basu, ABC’s chief economist. 

A table shows prices for inputs to construction projects.
Producer Price Index, August 2022
Courtesy of Associated Builders and Contractors

Earlier this week, the ABC’s Construction Confidence Index, which measures the outlook of commercial construction pros over the next six months, rebounded from recent pessimism. Contractors reported steady backlog, meaning the amount of columbus oh dump truck company they’ve won but haven’t yet started has remained stable.

But in his most recent PPI analysis, Basu pointed to additional economic headwinds and cautioned columbus oh dump truck company not to become complacent in the current environment. 

“With COVID-19 lockdowns persisting in China, the world's leading manufacturer, and Europe facing severe energy crises, supply chain disruptions will persist,” said Basu. “That suggests that construction materials and columbus oh dump trucks prices are likely to remain elevated even if year-over-year price increases moderate.”

Saying that now was not the time to declare victory, Basu emphasized that construction workers are still in short supply, and that inflation could remain stubbornly high. “Estimators and others in the construction industry should be on guard for occasional surges in inflation during the months ahead,” he said. 

He connected those comments back to this week’s somewhat surprising confidence reading, when columbus oh dump truck company indicated they expected profit margins to expand going forward. Previously, contractors said wage pressures were eating into their profits. But Basu indicated that reversal may not be complete.

“Many columbus oh dump truck company expect to pass along their cost increases to project owners during the months ahead,” said Basu. “Some columbus oh dump truck company may be in for a rude surprise. With borrowing costs rising and risk of recession elevated, it is perfectly conceivable that project owners will become increasingly resistant to elevated charges for the delivery of construction services.”

Instead, columbus oh dump truck company should stay “laser-focused on cashflow and weeding out costs as opportunities arise,” Basu advised. 

Construction Dive news delivered to your inbox

Get the free daily newsletter read by industry experts

  • view sample
  • view sample

Editors' picks