{"id":31860,"date":"2025-08-16T07:53:57","date_gmt":"2025-08-16T14:53:57","guid":{"rendered":"https:\/\/essential.construction\/news\/latest-producer-price-index-report-offers-little-relief\/"},"modified":"2025-08-16T07:53:57","modified_gmt":"2025-08-16T14:53:57","slug":"latest-producer-price-index-report-offers-little-relief","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/latest-producer-price-index-report-offers-little-relief\/","title":{"rendered":"Latest Producer Price Index report offers little relief"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><br \/>\n        <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/img\/play.svg?500116090725\" alt=\"-\"><br \/>\n        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">4 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1755265132\/news\/text_to_speech\/producer-price-index-report-little-relief-july_n3mivp.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li><a rel=\"nofollow noopener\" href=\"https:\/\/www.abc.org\/News-Media\/News-Releases\/abc-construction-materials-prices-jump-04-in-july\" target=\"_blank\"><span><span><span><span><span><span><span>Construction input prices ticked up 0.4%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in July, the same increase for nonresidential inputs, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics\u2019 Producer Price Index data.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Input prices now sit 2.2% higher overall and 2.6% higher for nonresidential construction compared to a year ago, according to the report. Copper wire and cable, for example, surged 4.9% in July and 12.2% year over year.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>That price escalation, fueled by trade policy, could compress <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/construction-backlog-confidence-abc\/757469\/\" target=\"_blank\"><span><span><span><span><span><span><span>contractor margins<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in the months ahead, even as builders still hold a relatively upbeat level of confidence, said Anirban Basu, ABC chief economist.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p><span><span><span><span><span><span>Rising tariff levels pushed <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.agc.org\/news\/2025\/08\/14\/costs-accelerate-again-july-nonresidential-construction-materials-tariff-drive-prices-aluminum-steel\" target=\"_blank\"><span><span><span><span><span><span><span>nonresidential construction input prices higher<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> for a third consecutive month, according to the Associated General Contractors of America.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Duties on aluminum and steel, along with a more recent tariff on raw copper, have prompted suppliers to raise prices. Aluminum mill shapes jumped 7.4% for the month and 13.7% from a year ago. Meanwhile, copper and brass mill shapes increased 5.7% for the month and 6.9% year over year. Steel mill products slipped 0.5% in July, though they still sit 8.8% higher compared to July 2024, according to AGC.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cSteep tariff increases earlier this year\u2026 drove the producer price index for construction inputs higher,\u201d said Ken Simonson, AGC chief economist. \u201cEven though contractors do not generally import materials directly, it is clear that domestic producers are raising prices in line with the protection tariffs are providing them.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span><span><span><span><span><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdLxq6oG-cgkvEWwtZAUDj7Np0fjAhhcHD0MkLpEdlRi92Cbd3_n-yjw-T_kjwejSnCsZowl01230e1o2L5anLCOdsVDIEOw5ajUEt5nnH6MV_jE3_632BdZnb3hlE96DlYBZHXDQ?key=DeR59gQGJ2J6Be3T8FiF5Q\" alt=\"-\"><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>That\u2019s making contractors feel the squeeze at a time when <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/interest-rate-cut-july-federal-reserve-construction\/756328\/\" target=\"_blank\"><span><span><span><span><span><span><span>higher interest rates<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and market uncertainty have cooled demand for some private sector work. <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/nonresidential-construction-spending-drops-sixth-time-seven-months-june\/756676\/\" target=\"_blank\"><span><span><span><span><span><span><span>Nonresidential construction spending decreased<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> again in June, the most recent month for data, for the sixth time over the past seven months.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>But July\u2019s Producer Price Index may have a more tempered impact, said Paul Giorgio, chief operating officer at Los Angeles-based Eldridge Acre Partners, which recently spun off from AECOM Capital as a separate investment real estate firm.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cAlthough the PPI rose 0.9% which was higher than 0.2% expectations, the impacts to the consumer and owners were not impactful as the Consumer Price Index only had an insignificant 0.2% increase and only 2.7% increase year-over-year,\u201d Giorgio told Construction Dive. \u201cThese adjustments are in line with normal escalation and not material.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Nevertheless, the cost of key inputs, such as aluminum, steel and copper, continues to rise faster than anticipated, said Michael O\u2019Reilly, vice president at Rider Levett Bucknall, a New York City-based construction consultancy firm. That\u2019s causing the <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/construction-stress-eases-but-contractors-remain-cautious\/757335\/\" target=\"_blank\"><span><span><span><span><span><span><span>construction industry to remain cautious<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWhile some relief may come from potential interest rate cuts later this year, much of the industry\u2019s optimism hinges on trade policy stabilization,&#8221; O\u2019Reilly told Construction Dive. \u201cWithout meaningful changes to tariff structures or supply chain conditions, the construction sector may continue to face headwinds through the remainder of 2025.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>ABC\u2019s Basu cautioned broader inflationary pressures may complicate the Federal Reserve\u2019s decision on interest rates in September.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWith prices for final demand goods and services rising at the fastest pace since March 2022, the Federal Reserve will have to consider the prospect of resurgent inflation when deciding whether or not to cut rates at its September meeting,\u201d said Basu. \u201cThe construction industry is in desperate need of lower borrowing costs, and higher rates for longer would continue to weigh on construction spending.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/producer-price-index-report-july\/757774\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 4 min This audio is auto-generated. 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