Construction material prices rose 0.5% in April and are up 2.3% on a year-over-year basis, according to Associated Builders and Contractors. Prices in March were 42.1% higher than in February 2020.
Nonresidential construction material prices rose 0.6% from March to April and increased 2.2% compared with one year ago. Softwood lumber prices are down 4.3% year over year and up 1.4% from March to April. Iron and steel prices are down 9.6% year over year and 1.7% for the month. Natural gas fell 0.9% from March to April and is down 25.5% year over year. Crude petroleum rose 10.6% for the month and is up 7.6% year over year.
“Construction input prices jumped half a percentage point higher in April and have increased 3.5% over the first four months of the year,” said ABC Chief Economist Anirban Basu. “While iron, steel, asphalt and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when nearly 1 in 4 contractors expect their margins to contract over the next two quarters, according to ABC’s Construction Confidence Index.
“Perhaps more importantly for contractors, the overall Producer Price Index reading for final demand goods and services increased 0.5% in April,” Basu continued. “This is yet another sign that inflation is accelerating and suggests that interest rates are set to stay higher for longer.”
