An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices rose 3.5% from February to March, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 12.9%.
Nonresidential construction material prices rose 3.5% from February to March and increased 12.4% compared with one year ago. Softwood lumber prices are up 83.4% year-over-year, and iron and steel prices are up 37.5%.
“With the global economy reawakening from its slumber, demand for key inputs is expanding,” said ABC Chief Economist Anirban Basu. “Meanwhile, supply continues to be constrained by many factors, including ongoing concerns regarding worker health, trade disputes, shifting global supply chains and political actions.
“Intuition suggests that construction input price increases are likely to keep rising,” Basu continued. “Vaccination programs are advancing in much of the world, unleashing pent-up demand for various goods and services in the process, and contractors are confident that their sales will increase over the next six months, according to ABC’s Construction Confidence Index. The International Monetary Fund indicates that the worldwide economy is poised for its fastest expansion ever measured, based on records dating back to 1980. While we will likely see further materials price increases going forward, the pace of increase may not be as rapid. As the COVID-19 pandemic fades, suppliers will be better positioned to respond to demand. That will help moderate price increases at some point, though in the very near-term, contractors should anticipate additional cost escalations.”
