Construction Materials Prices Stabilize as Supply Chains Improve

Construction input prices remained unchanged again in July, marking the fifth consecutive month of no upward movement, according to Construction Dive. Overall construction costs are 3.1% lower than a year ago, and fewer supply chain disruptions are a major contributor.

That stability is good news for home builders, which are seeing heightened demand in the new-home market, but while materials prices are falling, the cost of construction equipment is on the rise, increasing 2% on a monthly basis in July and nearly 10% over the past year.

“Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy,” said Anirban Basu, ABC chief economist, in the release. “It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S.”

“With the exception of energy prices, which are heavily influenced by a cocktail of geopolitics, weather and investor frenzy, construction materials prices should be reasonably stable during the months to come,” said Basu. “As supply chains have normalized, unmet demand has been more readily satisfied.”

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