ABC: Construction Equipment Prices Up in January

Feb. 26, 2024
Prices are up 0.6% in January and 4.5% compared to a year ago.

Construction equipment prices increased 0.6% in January compared to December, 4.5% compared to a year ago, and 29.5% since 2020, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data.

Construction input prices are 0.4% higher than a year ago, and nonresidential construction input prices are 0.7% higher. Prices were up in one of the three energy subcategories last month. Crude petroleum input prices were up 6.1%, while unprocessed energy materials were up 3.8%. Natural gas prices fell 2.4% in January. Iron and steel prices rose 3.5%. 

“Construction materials prices surged in January, ending a streak of three consecutive monthly declines,” said Anirban Basu, chief economist ABC, in a statement. “While this represents the largest monthly increase since August 2023, input prices are essentially unchanged over the past year, up less than half a percentage point. As a result of relatively tame input costs, a plurality of contractors expects their profit margins to expand over the next six months, according to ABC’s Construction Confidence Index.

“Additionally, the broader PPI measure of prices received by all domestic producers of final demand products and services rose 0.3% in January, well above the expected 0.1% increase,” said Basu. “This, along with the hotter-than-expected Consumer Price Index data released earlier this week, suggests that the Federal Reserve may keep interest rates elevated for longer than previously expected.”

Source: Associated Builders and Contractors (ABC)