Construction materials prices fell 0.2 percent in October and are down 0.3 percent year over year, according to the November 21 Producer Price Index released by the Department of Labor. Nonresidential construction materials are down 0.5 percent for the month and are unchanged from the same time one year ago.

“We continue to observe a lack of significant inflationary pressures both globally and nationally,” says Associated Builders and Contractors Chief Economist Anirban Basu. “Despite ongoing expressions of concern regarding inflation due to stimulus measures being conducted by the U.S. Federal Reserve and other major central banks around the world, the data continue to reflect remarkable stability in construction materials prices.”

Overall, the nation’s wholesale goods prices expanded 1 percent in October and are up 2 percent year over year. “Inflation as measured by the Producer Price Index and other indices remains well within Federal Reserve tolerances, suggesting that the institution’s bond purchasing program is likely to remain fully intact for now,” says Basu.

“However, there is no guarantee that the stability of materials prices will persist,” Basu adds. “The situation in Iran appears to be heating up and that could ultimately translate into commodity supply interruptions, boosting prices in the process. Moreover, U.S. economic growth is expected to accelerate next year, which, all things being equal, tends to push input costs higher.”

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