In September 2024, construction input prices experienced a 0.9% decline, largely attributed to a sharp drop in energy-related costs. According to data from the U.S. Bureau of Labor Statistics and the Associated Builders and Contractors (ABC), the reduction in crude petroleum prices played a major role, with crude petroleum falling 16.7%. Despite this positive trend, there are still challenges for contractors, as some materials, like gypsum and fabricated structural metals, saw price increases.
This decline in input prices is an encouraging sign for the industry, as overall construction input prices are now 1.9% lower than they were at the same time last year. Nonresidential construction, in particular, saw a 2.1% drop year-over-year, giving contractors a bit of breathing room in terms of project costs. However, supply chain vulnerabilities and global shipping rates remain a concern, as they could lead to price increases in the coming months.
Energy Costs Leading the Decline
The most significant driver of this recent trend is the decline in energy prices, which has brought down the cost of transporting goods and manufacturing key construction materials like steel, concrete, and asphalt. As shown in the chart above, crude petroleum experienced the steepest drop, followed by other energy subcategories. However, natural gas prices increased slightly by 2.4%, adding a level of uncertainty to future price trends.
Construction Input Prices by Industry and Commodity Breakdown
The table provides a detailed look at the month-to-month and year-over-year changes in various construction sectors and materials.
- Crude Petroleum: The largest decline, with a 16.7% drop this month and 27.8% decrease year-over-year.
- Gypsum Products: Saw a modest price increase of 0.6% in the past month, highlighting the variability in material costs.
- Structural Metal Products: While experiencing a small decrease of 0.1%, this material remains an area to watch as future supply chain issues could influence prices.
This data reinforces that while the current market conditions are favorable in terms of energy costs, the construction industry must remain vigilant, especially as global supply chain challenges continue to evolve.
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