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Construction Industry Input Prices Drop
Nine Straight Months of Annual Declines

Prices for key products the construction industry uses, or inputs, decreased slightly in August on a month-to-month basis, but the biggest declines are in the year-to-year data.

Prices for key products regularly used by the construction industry declined slightly from July to August, and are down 3.9 percent on an annual basis.

Citing Bureau of Labor Statistics data, the ABC said year-to-year prices for construction inputs have now dropped in each of the last nine months. This is the longest such streak since the March-to-November time frame of 2009.

Construction industry input prices dropped 0.1 percent in July, and another 0.9 percent in August. Year-to-year prices declined 3 percent in July.

Inputs to the nonresidential construction industry also followed suit, losing 0.8 percent in August, and 4.7 percent for the year.

"Commodity markets were particularly frenzied in August due to a series of events in China, Brazil, Iran and other parts of the world," said Anirban Basu, chief economist for the Associated Builders and Contractors.

"The result is that input prices continue to slide lower, defying predictions from earlier this year suggesting that commodity prices would stabilize and at some point head higher," Basu added. "Global demand remains low and there is a chance that prices could fall even lower during the months ahead."

Eight key input prices fell or remained flat:
Crude energy materials dropped 9.5 percent in August and are down 40.5 percent on a year-to-year basis.

Fabricated structural metal products were unchanged for the month and are down 0.4 percent for the year. Iron and steel prices declined 2.9 percent in August and 17.6 percent for the year.

Steel mill products decreased 0.7 percent in the month and 14.1 percent from last year.

Nonferrous wire and cable prices are down 1.1 percent in August and 6.9 percent compared to last year. Softwood lumber prices fell 3.2 percent on a monthly basis and 7.5 percent for the year.

Prices for concrete products dropped 0.2 percent in August but are up 2.6 percent on an annual basis. Crude petroleum prices plummeted 20 percent in August and are down 57.3 percent for the year.

Only three key input prices rose in August:
Prepared asphalt, tar roofing and siding climbed 2.2 percent for the month and 2.4 percent for the year. Natural gas prices went up 2.2 percent for the month but are down 29.2 percent for the year.

Plumbing fixtures increased 0.2 percent monthly and 1.2 percent compared to August 2014.

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October 13, 2019, 6:45 pm PDT

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