Construction input prices fell 2.7% in December compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices also declined 2.7% for the month.
Overall construction input prices are 7.9% higher than a year ago, while nonresidential construction input prices are 7.6% higher. Crude petroleum prices fell sharply in December, down 14.9%, while natural gas prices surged 45.3%.
“This Producer Price Index data represents another positive development on the inflation front,” said ABC Chief Economist Anirban Basu. “However, this is both good and bad news. Recent consumer and producer price releases indicate that inflation is fading, though it remains well above the Federal Reserve’s 2% target. Should inflation continue to abate, the Federal Reserve may be able to stop increasing interest rates sooner than anticipated. Interest rate-sensitive segments like real estate and construction would be among the primary beneficiaries. Contractors are currently maintaining their longest backlog since 2019, according to ABC’s Construction Backlog Indicator.
“But the decline in input prices may also be a reflection of spreading economic weakness, both in the United States and other parts of the world,” said Basu. “Moreover, there could be bad news on inflation in the months ahead. War continues in Eastern Europe and the commodity use-intensive Chinese economy is in the process of reopening. Though there is evidence of improving supply chain functioning and moderation in input prices, contractors should not be tempted into complacency.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings, GDP and the Producer Price Index.
Related Stories
| Aug 11, 2010
ASHRAE releases free BIM introductory guide
A newly released guide from ASHRAE on building information models and building information modeling (BIM) serves as a resource for professionals considering BIM tools and applications for their businesses. According to "An Introduction to Building Information Modeling," BIM is “a digital representation of the physical and the functional characteristics of a facility.” Unlike 2D or 3D CAD, BIM software utilizes intelligent objects to create models.
| Aug 11, 2010
AIA report estimates up to 270,000 construction industry jobs could be created if the American Clean Energy Security Act is passed
With the encouragement of Senate majority leader Harry Reid (D-NV), the American Institute of Architects (AIA) conducted a study to determine how many jobs in the design and construction industry could be created if the American Clean Energy Security Act (H.R. 2454; also known as the Waxman-Markey Bill) is enacted.
| Aug 11, 2010
VAST Enterprises wins "Design for Sustainability"
VAST Enterprises, LLC announced that it won the "Design for Sustainability" Award from the Plastics Environmental Division of the Society of Plastics Engineers. VAST received the honor as part of the 2010 Environmental Stewardship Awards competition.
| Aug 11, 2010
BuildSite introduces LEED submittal templates for green building
BuildSite, a single source of product, technical, and procurement information for construction, has introduced online submittal templates tied to BuildSite Green Data.
| Aug 11, 2010
NoricF4 custom metal ICF frames receive fire ratings, comply with antiterrorism standards for buildings
Reward Wall Systems' NoricF4 Custom Metal ICF Frames have received fire ratings of 1.5 hours to 3 hours and they have been evaluated to be in compliance with the prescriptive requirements of the Department of Defense Minimum Antiterrorism Standards for Buildings for blast/force protection.
| Aug 11, 2010
Nation's first set of green building model codes and standards announced
The International Code Council (ICC), the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), the U.S. Green Building Council (USGBC), and the Illuminating Engineering Society of North America (IES) announce the launch of the International Green Construction Code (IGCC), representing the merger of two national efforts to develop adoptable and enforceable green building codes.
| Aug 11, 2010
Retail construction recession to end later in 2010
The recession reduced retail construction spending early and deeply, but now most of the decline should be behind us. Construction spending is down 48% over the last two-and-a-half years, and the value of retail construction starts reported by Reed Construction Data fell 41% in 2009 vs. 2008. Construction spending is expected to drop 5-6% more by late 2010; the decline will be close to 10% afte...
| Aug 11, 2010
A few bright spots for AEC firms in 2010
The AEC industry is heading into 2010 in better shape than was the case a year ago, according to the 2010 AEC Industry Outlook: Strategy and Insight for Design & Construction Firms, a new forecast released by ZweigWhite this month. A significant turnaround for the commercial market isn't anticipated until 2011, but a modest pickup is expected in late 2010.
