Building material costs continue to escalate
The prices of products used in residential construction increased 1.4% in March, according to the latest Producer Price Index (PPI) report released today by the Bureau of Labor Statistics.
The March increase follows an upwardly reviewed increase of 2.2% in February and 4.1% in January.
According to the National Association of Home Builders (NAHB), this adds up to an 8% rise in building material prices since the start of 2022.
On a year-over-year basis, building material prices increased 20.4% and are up 33% since the start of the pandemic two years ago.
Residential construction services inputs rose 3.2% in March, 5.1% in February, and 6.2% in January. The price index of services used in home building (including trade services, transportation, and warehousing) is up 15.2% since the start of the year.
Year-over-year, the services index increased 18.5% and has soared 39% since the pandemic began.
Following increases of 2.6% in February and a 25.6% surge in January, the PPI for softwood lumber (seasonally adjusted) increased 6% in March.
Steel mill products prices declined 4.9% in March while the PPI for gypsum products moved ahead 1.6%. The ready-mix concrete PPI slipped 0.9% in March but is 9% higher than January 2021.
Overall construction input prices rose 2.9% in March, according to an Associated Builders and Contractors (ABC) analysis of the PPI. ABC also reported that non-residential construction prices increased 2.8% in March.
“Consumers are right to complain about inflation, which has been north of 8% during the past year,” said ABC Chief Economist Anirban Basu. “But America’s contractors have experienced materials price inflation nearly three times that during the same period. For now, there are few signs of relief. Many prices rose on a monthly basis in March, reflecting ongoing upward price momentum, including iron and steel (1.4%), key roofing materials (1.6%), and nonferrous wire and cable (4.4%).”
Nonresidential construction input prices are up 25% from a year ago and 39.2% higher since the pandemic began, ABC reported.
Natural gas prices are up more than 200% since the start of the pandemic, while crude petroleum prices are up more than 100% over that span.
