Inflationary Pressure Easing For Some Construction Materials

Cement plant
A Cement Plant.

The price of construction materials was still rising in June, but there are indications that inflationary pressures on at least some construction inputs are starting to ease, according to Associated Builders and Contractors.

Overall, construction input prices were up 1.9% in June compared to the previous month, according to ABC's analysis of U.S. Bureau of Labor Statistics data, and up 20.3% compared with June 2021.

But some materials prices actually dropped in June.

Softwood lumber dropped 24.8% month-over-month, according to BLS data, and fell 38.1% compared with a year ago.

Other material price drops were more modest, such as iron and steel, which were down 2.9% for the month, but those products are still more expensive than they were a year ago.

The sharpest increases in construction inputs by far are energy, with the cost of natural gas up 24.3% for the month in June and 224.5% for the year, and oil up 19.4% for the month and 77.1% for the year.

Since the end of June, some energy prices have started to decline, with oil dropping to $95 per barrel this week after spiking to $120 in May.

"More recently, key commodity prices have declined, so it may be possible we have achieved peak inflation," ABC Chief Economist Anirban Basu said in a statement.

"With much of the world at risk of recession, there is likely to be further downward pressure on commodity prices going forward,” Basu said.

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