Prices of construction machinery and equipment were up 0.2%, in December, compared to November, according to the Associated Builders and Contractors (ABC). Compared to December 2022, prices have increased 7.6%, and prices are up 28.9% compared to February 2020, the month before the pandemic rolled in.
Overall construction input prices are 1.2% higher than a year ago, and nonresidential construction input prices are 1.6% higher. Prices decreased in two of the three energy subcategories last month. Crude petroleum input prices were down 9.5%, while unprocessed energy materials prices were down 3.2%. Natural gas prices rose 24.1% in November.
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“Construction input prices fell sharply in December,” said Anirban Basu, chief economist, in a statement. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year during which aggregate input prices increased just 1.2% and many individual commodity prices actually fell.
“Despite continued materials price moderation and other positive developments regarding inflation, the outlook is not without risks,” said Basu. “Piracy in the Red Sea and the resulting diversion of ships from the Suez Canal around the Cape of Good Hope has caused global freight rates to nearly double in the first two weeks of 2024, according to the Freightos Baltic Index. All else equal, rising shipping costs will put upward pressure on certain inputs.”
Source: Associated Builders and Contractors
