WASHINGTON, DC — Building enter costs expanded 0.4% in February in comparison with the earlier month, in keeping with an Related Builders and Contractors evaluation of US Bureau of Labor Statistics Producer Worth Index information launched at this time. Nonresidential development enter costs additionally rose 0.4% for the month.
General development enter costs are 2.6% larger than a 12 months in the past, whereas nonresidential development enter costs are 2.8% larger. Pure gasoline costs fell sharply in February, down 41.4%, whereas crude petroleum costs rose 7.3%. Unprocessed vitality supplies costs had been down 9.1% for the month.
Behind the Numbers
“Whereas the February development supplies value inflation information seem benign, a peek behind the headline numbers signifies that value pressures stay ample,” mentioned ABC Chief Economist Anirban Basu. “For instance, the worth of brick and structural clay tile expanded 3.4% for the month and is up almost 9% over the previous 12 months. The worth of copper wire and cable elevated 3.3% on a month-to-month foundation and is up 40% since February 2020. In massive measure, sharp declines in vitality costs have pushed headline numbers decrease in current months, however there may be plentiful proof of lingering supplies value inflation and provide chain challenges within the information.
“With rising strain on the worldwide banking system and the Federal Reserve nonetheless wrestling with extra inflation, dangers of recession proceed to increase,” mentioned Basu. “Whereas contractors performing public development and dealing on industrial megaprojects stand to fare nicely through the years forward, the fortunes of many different contractors are more and more threatened by elevated prices of capital, tightening monetary circumstances and the rising value of delivering development providers. Ultimately, these components might whittle away at backlog, which is at present elevated, in keeping with ABC’s Building Backlog Indicator, creating higher challenges for contractors in 2024 and/or 2025.”
Go to abc.org/economics for the Building Backlog Indicator and Building Confidence Index, plus evaluation of spending, employment, job openings and the Producer Worth Index.