The skyrocketing cost of building materials is finally starting to come down.
Nonresidential construction input prices decreased 1.8% in July compared to the previous month, according to the Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. It was the first decline in more than two years — or since April 2020. (Prices are still 17.3% higher than a year-ago.)
Input prices were down in eight of 11 subcategories on a monthly basis. Prices in all three energy subcategories fell in July, with natural gas prices falling 27.6%, the largest decrease. Prices rose in concrete products, softwood lumber and plumbing equipment and fixtures.
“Today’s Producer Price Index data supplies additional evidence that inflation has peaked,” said ABC chief economist Anirban Basu. “A weakening global economy and ongoing supply chain adjustments have resulted in significant declines in the prices of a number of key commodities, ranging from oil to steel. While the risk of recession remains elevated, recent government reports on consumer and producer prices make it more likely that the Federal Reserve will be able to engineer a soft landing or that any recession to come could be quite mild.”