Producer Price Index ticks up in September
The Producer Price Index for final demand increased 0.5 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported Wednesday.
HBSDealer below tracks ten key categories. Note: unlike previous months, not a single category declined on a month-to-month basis (although three categories were reported as flat).
Here is the breakdown:
Overall construction input prices are 0.3% higher than a year ago, while nonresidential construction input prices are 0.6% higher, according to an analysis from the Associated Builders and Contractors, a construction industry trade group.
Prices increased in all three energy subcategories in September. Crude petroleum prices were up 10.1%, along with unprocessed energy materials prices, which rose 7.5% last month. Natural gas prices were up slightly by 0.1% in September.
“Today’s PPI report indicates that while inflationary pressures persist economywide, materials price increases are no longer at the heart of this bout of excess inflation,” said ABC Chief Economist Anirban Basu. “When inflation began to emerge in 2021, supply chains ill-prepared to handle surging demand for goods and services during the early stages of post-pandemic recovery were among the primary culprits.”
The economist added that inflation is being driven today by labor dynamics and geopolitics, and less so by supply chain issues. A primary challenge noted by many contractors is staffing—securing sufficient levels of workers.
“Over the past year, materials prices have been roughly flat, though certain segments like concrete have continued to experience upward price pressures,” Basu said. “Renewed conflict in parts of the world that produce a considerable amount of global energy could put more pressure on contractors during the months ahead, but such things are difficult to predict.”
