Material prices back on the rise – Construction Dive
Let Construction Dive’s free newsletter keep you informed, straight from your inbox.
Topics covered: commercial, infrastructure, design, green, regulation, multifamily construction, and more.
Topics covered: virtual design and construction, material and product innovations, productivity improvements through technological advancements, and more.
Topics covered: project delivery methods, contractor profiles, case studies of innovative projects and news from Capitol Hill, and more.
Topics covered: labor shortage, recruiting & retaining workers, OSHA & Department of Labor rulings, safety protocols, and more.
After December’s numbers posted lower results, Ken Simonson, chief economist at the Associated General Contractors of America, warned that lower costs could be short-lived.
“Some prices have already turned higher in January,” Simonson said last month. “Contractors are right to rank materials costs as a major concern for 2023.” The latest report seemed to lend credence to that warning.
An elevated producer price index is another indicator the Federal Reserve will maintain higher interest rates longer, said Basu.
For example, inputs to nonresidential construction and commercial construction remain 37.9% and 38.2% higher than February 2020. Commodities such as iron and steel remain 55.9% higher since February 2020, while other widely used materials such as concrete products also remain 27.9% higher compared to the start of the pandemic.
But many nonresidential contractors will feel little to no effect from higher interest rates in 2023, Basu said. That’s because, despite a slight tick down in January, industry backlog remains one month higher than in January 2022, and right around the same level of February 2020.
“Ironically, it is the current strength of the economy that makes a recession more likely sometime during the next 12 months,” said Basu. “At some point, higher interest rates will meaningfully affect economic activity.”
Get the free daily newsletter read by industry experts
A shrinking labor pool and supply chain delays impact subs’ bottom lines, but the silver lining of the IIJA has gotten shinier.
Construction technology continues to evolve even as the broader tech market hits a rough patch.
Subscribe to Construction Dive for top news, trends & analysis
Get the free daily newsletter read by industry experts
A shrinking labor pool and supply chain delays impact subs’ bottom lines, but the silver lining of the IIJA has gotten shinier.
Construction technology continues to evolve even as the broader tech market hits a rough patch.
The free newsletter covering the top industry headlines
