An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 2.8% from May to June, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 24.8%.
Nonresidential construction material prices rose 2.9% from May to June and increased 24.6% compared with one year ago. Softwood lumber prices are up 125.3% year-over-year though are down 2.1% from May to June. Iron and steel prices are up 73.2% year-over-year.
“This is becoming a real challenge for America’s nonresidential construction industry,” said ABC Chief Economic Anirban Basu. “Not only are these rising materials prices likely to induce more project owners to delay project starts, but ongoing inflation also makes it more likely that the Federal Reserve will have to begin tightening monetary policy sooner than anticipated and with greater force. Should that occur, interest rates will be pushed higher, adding to project financing costs. That could further forestall nonresidential construction’s recovery despite ABC’s Construction Confidence Indicator suggesting rising contractor optimism.”