ABC: December Construction Input Prices Fell Sharply - Modern Distribution Management

ABC: December Construction Input Prices Fell Sharply

U.S. Construction input prices continued to fall in December primarily due to plunging oil prices.
Panorama view at workers are working on large construction sites and many cranes are working in the, Industry new building business.

U.S. Construction input prices continued to fall in December primarily due to plunging oil prices.

Construction input prices decreased 0.6% in December compared to the previous month. It follows November’s 0.3% dip and a 1.2% decrease in October, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released Jan. 12.

“Construction input prices fell sharply in December,” said ABC Chief Economist Anirban Basu in a news release. “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.”

Nonresidential construction input prices decreased 0.4% for the month. Overall construction input prices are 1.2% higher than a year earlier, while 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 13.2%
  • Unprocessed energy materials were down 9.1%
  • Natural gas prices rose 1.5%

“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.”

Chart courtesy of ABC
Chart courtesy of ABC

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!