Dive Brief:
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The price of construction materials spiked in March, representing the greatest monthly increase in two years, according to the latest Construction Economic Update from Associated Builders and Contractors.
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Still, prices declined for more categories of products than they increased, the report said. Softwood lumber, iron and steel saw the steepest price dips. Nine of 11 key construction inputs did not expand in March.
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Fabricated structural metal product prices increased by 0.4% in March and by 1.3% year-over-year, and natural gas prices surged 1.5% in March, after dropping 45.3% from March 2014.
Dive Insight:
The fact that prices in most categories lost or held their ground was not a surprise, given that until February, prices for construction materials dropped every month for six months in a row.
While construction activity—and demand for materials—has expanded in the U.S., the sector is weak in Asia, Europe and Latin America, the report said. And as the U.S. dollar strengthens against other currencies, it is unlikely that foreign demand for U.S. construction products will significantly increase over the next few months—a factor that could stifle price growth.