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. Nonresidential construction input prices increased +1.4% for the month.
Construction input prices are +21.1% higher than in Oct. 2020, while nonresidential construction in-put prices increased +22.3% over that span. Steel mill product prices have increased +141.6% since Oct. 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 in the press release. “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. 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.”