Builders got a bit of a break during the third quarter as the cost of construction materials decreased some.
The Producer Price Index (PPI) for construction inputs, which includes materials such as cement, lumber and steel, fell during the quarter (July through September) by 0.1 percent.
The index rose 0.2 percent in September after declining 0.8 percent during August, according to a recent report issued by the U.S. Department of Labor.
The PPI for materials and components for construction declined 0.2 percent during September following a 0.1 percent fall in August.
However, during the past year, construction materials and components PPI have seen a slight increase of 1.2 percent.
Specific materials posting lower prices include nonferrous wire and cable, asphalt felts and coatings, steel mill products, softwood lumber, plastic construction products and gypsum products. In contrast, switchgear and switchboard equipment, concrete products, and air conditioning and refrigeration equipment all saw gains.
But looking ahead, the Associated Builders and Contractors (ABC) expects higher construction materials costs over the coming months.
ABC expects the demand for raw material prices to continue to rise due to the strong demand by global economies such as China, India and Brazil. ABC expects larger material cost increases during the next 12 months than experienced during the previous year.