Construction input prices continue to rise
As softwood lumber prices continue to increase, overall construction input prices also rose higher in March.
Associated Builders and Contractors (ABC), based on analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data, released today that overall nonresidential construction input prices increased 3.5% last month.
Construction input prices are 12.9% higher than in March 2020, and nonresidential construction input prices are up 12.4% during that span.
Softwood lumber prices ascended 6.8% over the previous month and are up 83.4% from March 2020.
Iron and steel price are up 13.5% in March and 37.5% from the pervious year.
“With the global economy reawakening from its slumber, demand for key inputs is expanding,” said said ABC Chief Economist Anirban Basu. “Meanwhile, supply continues to be constrained by many factors, including ongoing concerns regarding worker health, trade disputes, shifting global supply chains and political actions.”
Basu also said that construction prices are likely to keep rising.
“Vaccination programs are advancing in much of the world, unleashing pent-up demand for various goods and services in the process, and contractors are confident that their sales will increase over the next six months, according to ABC’s Construction Confidence Index,” he said.
The economist pointed out that the International Monetary Fund indicates that the worldwide economy is poised for its fastest expansion ever measured, based on records dating back to 1980.
“While we will likely see further materials price increases going forward, the pace of increase may not be as rapid,” Basu noted.