Construction input prices rose just 0.1% in July from the previous month but remained 7.4% higher than a year ago, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data.
Falling energy prices drove the flat reading: Crude petroleum dropped 11.9% and unprocessed energy materials fell 7.4% in July, while natural gas rose 10.4%. Lumber and wood products rose 1.5% for the month and were up 5.3% year-over-year, while adhesives and sealants edged up 0.3% and were 5.2% higher than a year ago.
ABC Chief Economist Anirban Basu said the July calm is unlikely to hold. The tame reading "can be traced to the dip in fuel prices that occurred at the start of the month," Basu said, noting diesel prices surged more than $0.50 per gallon between the week the index was measured and the end of July. Given rebounding oil prices and ongoing increases in materials such as lumber, he said, prices "will almost certainly continue to climb in the months to come."
Read the full report here.
