Construction Material Prices Rise
As posted recently by the National Roofing Contractors Association (NRCA), Associated Builders and Contractors (ABC), analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 0.8% from April to May. However, on a year-over-year basis, the price of construction materials decreased 6.8%.
Nonresidential construction material prices also rose 0.8% from April to May and decreased 6.8% compared with one year ago.
“Those who fixate on monthly data during times like these will find their views on the economy fluctuate from moment to moment,” said ABC Chief Economist Anirban Basu. “Construction input prices were down in April, leading one to believe that deflationary forces were at work in an environment characterized by massive job losses, project postponements, a reeling global economy and plunging energy prices. May came to represent the mirror opposite, with contractors becoming more upbeat, according to ABC’s Construction Confidence Index, rising energy prices and the nation adding jobs as the U.S. economy initiated its reopening.”
Basu goes on to say that it is important to look at the bigger picture.
“The world and nation remain in disarray,” Basu said. “Global supply chains are fragmenting. Trade wars are reemerging. State and local government finances are fragile, and there is an imminent presidential election. These are unsettled times, and therefore, data readings are likely to be highly variable from moment to moment. That statistical volatility does not represent a solid foundation upon which to make business decisions. Based on history, input prices are likely to be erratic from month to month, but given the fragile state of the economy, there is unlikely to be a sustained increase in input prices over the near-term. However, the story could be far different a year or two from now.”
Here at Wayne’s Roofing we are staying busy and continue to serve the community despite the challenges the world is facing.
For more information on changes in the construction industry, go to ABC.org for the latest in news and updates.