ABC: Construction Input Prices Continue to Rise
According to an ABC analysis report, construction input prices are continuing to rise. Softwood lumber prices rose 6.8 percent in the previous month and are up 83.4 percent since March 2020.
In an Associated Builders and Contractors (ABC) analysis of recently released U.S. Bureau of Labor Statistics data, construction input prices increased 0.9 percent on a monthly basis and 2.4 percent compared to the same time last year in April.
Nonresidential input prices increased 0.9 percent in April and are up 2.8 percent year on year.
Seven of the 11 subcategories saw price decreases last month, with natural gas (8.7 percent), iron and steel (1.7 percent), and steel mill products seeing the biggest drops (1.7 percent ).
Softwood lumber prices rose 6.8% over the previous month and are up 83.4% from March 2020.
Crude petroleum (+13.9 percent), unprocessed energy materials (+3.7 percent), prepared asphalt products (+2.7 percent), and concrete products (+1.1 percent) were the four subcategories that saw monthly price increases.
Prepared asphalt products (+7.5 percent), steel mill products (+5.8 percent), and plumbing fixtures (+4.3 percent) saw the greatest price increases year over year.
Anirban Basu, ABC Chief Economist stated, “Even though April was the third consecutive month that input prices increased and overall materials prices remained elevated, there is little reason for contractors to be on high alert. The increase in materials prices was primarily driven by higher energy prices. In particular, the price of oil mainly rose for political reasons, and therefore is not an indication that materials prices will aggressively increase.
“What’s more, the year-over-year increase in construction input prices is a mere 2.4%, which is only slightly higher than overall inflation and a bit lower than wage growth,” Basu continued.
“With much of the global economy slowing and given ongoing trade tensions between American and Chinese policymakers, it’s likely materials price increases will remain modest going forward, even in the context of a robust nonresidential construction sector.”