Construction Materials Prices Increase 1.4% in January, Up 40.5% Since February 2020

WASHINGTON, DC — Building enter costs elevated 1.4% in January in comparison with the earlier month, based on an Related Builders and Contractors evaluation of US Bureau of Labor Statistics’ Producer Value Index knowledge launched February 13. Nonresidential development enter costs elevated 0.9% for the month.

Total development enter costs are 1.3% larger than a yr in the past, whereas nonresidential development enter costs are 0.7% larger. Costs elevated in all three power subcategories final month. Crude petroleum costs elevated 14.8%, whereas pure fuel and unprocessed power materials costs elevated 13.7% and 13.0%, respectively.

“Supplies costs elevated on the quickest month-to-month tempo in two years in January,” stated ABC Chief Economist Anirban Basu. “This speedy escalation is essentially as a result of three components. First, power costs rose sharply. Second, producers typically elevate their costs in the beginning of the yr. And third, many purchasers rushed to purchase inputs earlier than potential tariffs may go into impact, and that surge in demand pushed costs larger.”

“Of those three components, tariffs are the one one that might proceed to push enter costs larger within the coming months,” stated Basu. “Import taxes enable home producers to lift their costs, and the brand new 25% levies on metal and aluminum will end in simply that if they continue to be in place. A robust majority of contractors count on their gross sales to extend over the following six months, based on ABC’s Construction Confidence Index, and the mixture of elevated demand for development inputs and ongoing provide chain confusion suggests enter worth escalation may speed up by means of the primary half of 2025.”