Construction input prices increased 1.5% in October, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices increased 1.4% for the month.
Construction input prices are 21.1% higher than in October 2020, while nonresidential construction input prices increased 22.3% over that span. 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.
“Any notion that the bout of pandemic-induced inflation was simply transitory has gone by the wayside,” said ABC Chief Economist Anirban Basu. “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.
“Despite increased vaccination levels, global supply chain disruptions persist,” said Basu. “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."
Related Stories
Market Data | Feb 13, 2019
Increasingly tech-enabled construction industry powers forward despite volatility
Construction industry momentum to carry through first half of 2019.
Market Data | Feb 4, 2019
U.S. Green Building Council announces annual Top 10 States for LEED Green Building in 2018
Illinois takes the top spot as USGBC defines the next generation of green building with LEED v4.1.
Market Data | Feb 4, 2019
Nonresidential construction spending dips in November
Total nonresidential spending stood at $751.5 billion on a seasonally adjusted annualized rate.
Market Data | Feb 1, 2019
The year-end U.S. hotel construction pipeline continues steady growth trend
Project counts in the early planning stage continue to rise reaching an all-time high of 1,723 projects/199,326 rooms.
Market Data | Feb 1, 2019
Construction spending is projected to increase by more than 11% through 2022
FMI’s annual outlook also expects the industry’s frantic M&A activity to be leavened by caution going forward.
Market Data | Jan 23, 2019
Architecture billings slow, but close 2018 with growing demand
AIA’s Architecture Billings Index (ABI) score for December was 50.4 compared to 54.7 in November.
Market Data | Jan 16, 2019
AIA 2019 Consensus Forecast: Nonresidential construction spending to rise 4.4%
The education, public safety, and office sectors will lead the growth areas this year, but AIA's Kermit Baker offers a cautious outlook for 2020.
Market Data | Dec 19, 2018
Brokers look forward to a commercial real estate market that mirrors 2018’s solid results
Respondents to a recent Transwestern poll expect flat to modest growth for rents and investment in offices, MOBs, and industrial buildings.
Market Data | Dec 19, 2018
When it comes to economic clout, New York will far outpace other U.S. metros for decades to come
But San Jose, Calif., is expected to have the best annual growth rate through 2035, according to Oxford Economics’ latest Global Cities report.
Market Data | Dec 19, 2018
Run of positive billings continues at architecture firms
November marked the fourteenth consecutive month of increasing demand for architectural firm services.