An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 1.3% from March to April, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 19.7%.
Nonresidential construction material prices rose 1.6% from March to April and increased 19.2% compared with one year ago. Softwood lumber prices are up 121.1% year-over-year, and iron and steel prices are up 57.7%.
“Over the past several weeks, the major challenge facing the U.S. nonresidential construction industry has shifted from COVID-19-induced disruptions to the ongoing surge in materials prices,” said ABC Chief Economist Anirban Basu. “Nonresidential input prices have surged, and much of that increase has occurred since the start of 2021. While some of this is attributable to so-called base effects—the result of unusually low prices that prevailed a year ago for certain commodities—it has become clear that supply is unable to keep pace with rapid demand growth in many instances, driving prices uncomfortably higher.
“Though ABC’s Construction Confidence Index has remained reasonably stable to date, there is growing concern in the industry regarding another bout of project postponements as higher costs induce project owners to delay construction,” Basu continued. “With the global economy steadily reopening, central banks continuing to pump up money supply, governments engaging in deficit spending and supply chain disruptions persisting, contractors can expect significant price pressures for months to come. While materials prices will capture headlines today, construction labor costs are also rising rapidly, further jeopardizing the recovery of nonresidential construction spending during the months ahead.”