Construction material prices increased 0.1% in July and are up 7.4% on a year-over-year basis, according to Associated Builders and Contractors. Prices in July were 53.3% higher than in February 2020.
Nonresidential construction material prices rose 0.1% in July and increased 7.2% compared with one year ago. Softwood lumber prices are up 6.4% for the month and 15% year over year. Iron and steel prices are up 2.4% for the month and 17.6% year over year. Natural gas rose 10.4% in July and is down 5.4% year over year. Crude petroleum fell 11.9% for the month and is up 14.6% year over year.
“Construction input prices were virtually unchanged in July, but that relatively tame behavior can be traced to the dip in fuel prices that occurred at the start of the month,” said ABC Chief Economist Anirban Basu. “Diesel fuel prices, for instance, surged more than $0.50 per gallon from the week prices were measured for the index through the end of July. Given the subsequent rebound in oil prices and ongoing increases in certain materials prices, such as lumber and iron and steel, materials prices will almost certainly continue to climb in the months to come.
“Materials prices remained up more than 7% on a year-over-year basis in July,” Basu continued. “Despite this significant annual increase and the prospect of ongoing inflation, contractors on net expect their profit margins to expand over the next six months, according to ABC’s Construction Confidence Index.”
