Construction materials prices are on the decline; however, prices are still higher than they were a year ago. Prices fell 1.8% in November according to Associated Builders and Contractors (ABC), yet materials prices were more than 5% higher than the previous November.
"Earlier in 2018, materials prices were racing skyward due to a combination of strong domestic demand, a synchronized global economic recovery, pervasive increases in asset prices, and tariffs imposed on steel, softwood lumber and other inputs," said ABC Chief Economist Anirban Basu in a release.
Natural gas in nonresidential construction saw the largest one-month change with an increase of 15%, while steel mill products had the biggest 12-month increase of nearly 20%. Crude petroleum saw the largest drop in price at more than 29%, and softwood lumber declined the most on a 12-month basis falling 10.5%. Five of the 11 nonresidential subcategories declined from October to November.
"With the global economy expected to continue to weaken and the dollar expected to remain strong, contractors should expect only moderate increases in materials prices during the early months of 2019, though further declines in input prices are certainly possible," concluded Basu.
-Michael Miller, managing editor