Building material prices rose last month, as construction input prices increased 1.5% in October, according to an Associated Builders and Contractors analysis of the Bureau of Labor Statistics’ Producer Price Index data released earlier this week.
Nonresidential construction input prices increased 1.4% in October.
Construction input prices are 21.1% higher than in October of last year, while nonresidential construction input prices increased 22.3% over that period.
Steel mill product prices have increased 141.6% since October 2020, while iron and steel prices are up 101.5%.
Softwood lumber prices, which surged during the pandemic, are now down 19.5% from the same time last year, according to the analysis.
“Any notion that the bout of pandemic-induced inflation was simply transitory has gone by the wayside,” ABC Chief Economist Anirban Basu said. “Inflation continues to endure, particularly in multiple commodity categories that directly impact the cost of delivering construction services in America. These materials price increases are simply mind-boggling, with iron and steel prices up more than 100% over the past year.”
Basu continued, “Despite increased vaccination levels, global supply chain disruptions persist. Contractors should expect elevated prices well into 2022. According to ABC’s most recent Construction Confidence Index, the average contractor expects profits to decline over the next six months as the combination of high materials prices and an ongoing shortage of workers conspires to put pressure on margins.”
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