Construction supplies cost 0.1% less in July than in June, when prices increased by 0.2%, according to the Bureau of Labor Statistics.
Key input prices fell or remained flat last month in every product category except softwood lumber, which rose by 6.2% in July but was 3.7% lower than it was a year ago, according to the BLS.
In an analysis of the government numbers by the Associated Builders and Contractors, Chief Economist Anirban Basu predicted “further downward pressure” on input costs will result in an even lower price report for August.
The July numbers bucked conventional wisdom, which says prices of building materials should spike when construction spending is up and fall when spending is down.
Yet the prices of concrete, fabricated structural metal products, iron and steel, prepared asphalt, metals, and nonferrous wire and cable fell slightly last month. Crude energy materials and crude petroleum prices tumbled more substantially.
“The state of affairs today is unprecedented,” Basu said, noting that that commodity price dips likely are a reaction to global economic trends, particularly the softening growth in China.
The silver lining: Low material prices during a U.S. building boom means higher profit margins for contractors. The exception: construction firms heavily invested in the oil and natural gas industries.