Cost of Construction Material Sees Decline After 1.5 Years
April 13, 2023
The construction industry has experienced a decrease in prices for construction and nonresidential inputs in the last year, according to a new analysis by the Associated Builders and Contractors. The cost of building is still 39.5% higher than before the pandemic, but the industry has experienced its first year-over-year decrease in 18 months.
The price decreases were attributed to a drop in energy prices, with natural gas seeing a 21.4% decrease, crude petroleum a 10.2% decrease, and unprocessed energy materials an 11.9% decrease. However, some products, including concrete, construction machinery and equipment, and industrial control equipment, have seen double-digit price increases.
Contractors remain wary about committing to projects due to fluctuating material costs and lead times. The Bureau of Labor and Statistics has reported a 49% drop in job openings in the industry from December to January and a 37% drop from the year before. The uncertainty has also led some contractors to make hard staffing decisions, as job openings in the construction industry have decreased significantly.