Overall Costs for Construction Materials Decline Steeply in December
Plunging prices for diesel fuel, lumber, and steel cooled inflation for materials and services used in construction in December, but relief may be short-lived, according to an analysis by the Associated General Contractors of America of government data released today. Association officials noted that contractors listed material costs as one of their top concerns in a survey the association released this month.
“While producer price indexes for construction inputs fell in December, they still outpaced other inflation measures for the year,” said Ken Simonson, the association’s chief economist. “In addition, some prices have already turned higher in January. Contractors are right to rank materials costs as a major concern for 2023.”
The producer price index for inputs to construction—the prices charged by goods producers and service providers such as distributors and transportation firms—rose 7.2 percent in 2022 despite decreasing 1.8 percent from November to December. The year-over-year rise outpaced the 6.5 percent increase in the consumer price index—the best-known measure of inflation, the economist noted.