PPIs diverge for construction costs; heavy materials suppliers report varying demand trends

Divergent trends are emerging for construction costs, as indicated by producer price indexes (PPIs) for June that the Bureau of Labor Statistics (BLS) posted on Friday. AGC posted tables showing PPIs relevant to construction. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—declined 0.3% for the month, following a 0.1% dip in May. The year-over-year (y/y) increase of 2.2% compared with a rise of 5.5% a year earlier and was the smallest y/y increase since June 2017.

Census Pulse Survey finds modest improvements; ConstructConnect starts plunge in May

The Census Bureau on Thursday released the results of its sixth Small Business Pulse Survey, with responses from May 31 to June 6, that “is intended to provide crucial weekly data on the impact of the COVID-19 crisis on the nation’s businesses.” There was modest improvement in several metrics for construction firms. The share that added employees was the highest yet (11.5%, vs. 10.1% in the May 24-30 survey). For the fifth-straight week there were declines in the share with a decrease in employees (12.1% vs. 12.4% a week before) or supply-chain disruptions (31.4% vs. 33.3%). The share of construction respondents that closed a location for at least one day was unchanged at 17.8%. More construction firms than in the five previous surveys reported “little or no effect on…normal level of operations relative to one year ago” (17.1% vs. 13.5% one wee k earlier).