The cost of construction materials took a breather in April, while contractors showed slightly greater ability to roll past price increases into their bids, according to an analysis of producer price index figures released by Associated General Contractors of America (AGC).
Ken Simonson, the AGC's chief economist, noted that there was a rise of 0.1% in April and 2.5% over 12 months in the producer price index for inputs to construction – a weighted average of the cost of materials used in all types of projects, plus items consumed by contractors such as diesel fuel. That was the smallest year-over-year increase since early 2009, he observed.
AGC officials noted that despite the temporary reprieve from materials price hikes, market conditions for construction remain difficult.
“Contractors caught a bit of a break on major input costs in April, enabling some firms to make up for recent price spikes,” Simonson said. “However, workloads remain uneven by segment and geographical region, leaving many firms very vulnerable to unexpected price hikes for key materials.”