Construction material prices increased 2.6% in May and are up 9.6% on a year-over-year basis, according to Associated Builders and Contractors. Prices in April were 55.5% higher than in February 2020.
Nonresidential construction material prices rose 2.4% in May and increased 9.7% compared with one year ago. Softwood lumber prices are up 0.5% for the month and 4.8% year over year. Iron and steel prices are up 1.4% for the month and 7% year over year. Natural gas fell 18.2% in May and is down 27.1% year over year. Crude petroleum rose 11.8% for the month and is up 78.2% year over year.
“Construction input prices surged again in May and are now up nearly 10% year over year,” said ABC Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper. Contractors remain optimistic that their profit margins will expand over the next six months, according to ABC’s Construction Confidence Index, yet it appears likely that materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability.”
