Prices for construction materials continued to decrease in the early part of 2016, although industry experts expect those prices to start moving upward in early spring and later.
February 2016 marked the eighth consecutive month of material price decreases, according to Associated Builders and Contractors (ABC), a major industry trade group.
Construction input prices were down 0.6 percent in February 2016, marking a 3.7 percent decrease since February 2015, the ABC reported. Nonresidential inputs showed a 0.7 percent decrease from January 2016 and a 3.8 percent decline since February 2015, according to the ABC.
The ABC’s findings were reached following an analysis of the U.S. Bureau of Labor Statistics Producer Price Index released on March 15, 2016.
Prices slid downward in eight key areas, the ABC noted. These include:
- Crude petroleum
- Unprocessed energy material
- Fabricated structural metal
- Steel mill products
- Plumbing fixtures and fittings
- Nonferrous wire and cable
- Iron and steel
- Softwood lumber.
In contrast, only three areas experienced increases in February 2016.
- Prepared asphalt and tar/roofing and siding products
- Concrete products
- Natural gas
Anirban Basu, the ABC’s chief economist, found that global financial issues, such as weakness in the commodity markets, lackluster economic growth in the United States and abroad, and strengthening of the U.S. dollar contributed to the cost declines.
The price decreases are not expected to last throughout the year, however. The ABC expects prices to rebound beginning in March 2016 or later. Upticks in prices are not expected to be substantial, however, noted reporter Emily Peiffer, writing on the Construction Dive website.
Peiffer also reported that declining construction material costs have harmed the U.S. energy sector and the regional and local economies that rely on it. Even a modest increase in prices in March or later is expected to help give those economies a boost, Peiffer noted.
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