“Today’s release gives us a snap shot of the current state of the nation’s construction industry,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Demand for construction services, in general, continues to fall short of capacity. However, the decline in construction materials prices in August now makes the purchase of construction services more attractive.

“Still, the 0.6 percent decline registered last month falls short of reversing construction material price increases in earlier months,” Basu said. “Materials prices are still nearly 8 percent higher than they were a year ago.

“Much of the overall decline in materials prices is attributable to a decline in crude petroleum prices, but prices for many other items also slipped in August,” said Basu. “Among the key materials that experienced price declines were steel mill products, fabricated structural metal products and asphalt. These falling prices are likely attributable to perceptions of a slowing global economy. Not only has economic activity decelerated in America and in Europe, but forecasts for much of the emerging world are also being steadily downgraded.

“It is quite possible that materials prices will continue to decline in the months ahead. The global economy does not appear to be positioned for significant improvement in the near-term, which implies softer demand for construction materials,” Basu said. “However, the slowdown in global activity produces a belief among many investors that central banks around the world will increase money supply.

“That, in turn, reduces the attractiveness of paper assets such as bonds,” said Basu. “In response, certain investors sell bonds and purchase commodities, which cause those prices to rise even in the midst of generally weak economic performance.”