ABC analysis shows costs up almost 20 percent in the last year Construction-input prices — the costs of materials and energy sed in building projects — increased 1.3 percent in April from March, according to an analysis of U.S. Bureau of Labor Statistics (BLS) Producer Price Index data by Associated Builders and Contractors (ABC). But construction-input prices are […]
ABC analysis shows costs up almost 20 percent in the last year
Construction-input prices — the costs of materials and energy sed in building projects — increased 1.3 percent in April from March, according to an analysis of U.S. Bureau of Labor Statistics (BLS) Producer Price Index data by Associated Builders and Contractors (ABC).
But construction-input prices are up 19.7 percent since April 2020, with nonresidential prices climbing 19.2 percent over the last year.
Softwood-lumber prices skyrocketed 121.1 percent over the past 12 months. Energy costs also experienced significant year-over-year price increases, with the price of crude petroleum rising 245.2 percent, unprocessed energy materials increasing 117.7 percent, and natural gas up 114.6 percent.
“Nonresidential input prices have surged, and much of that increase has occurred since the start of 2021,” ABC Chief Economist Anirban Basu said in a release. “While some of this is attributable to so-called base effects — the result of unusually low prices that prevailed a year ago for certain commodities — it has become clear that supply is unable to keep pace with rapid demand growth in many instances, driving prices uncomfortably higher.”
ABC contends there is concern within the construction industry that the soaring prices will lead to an increase in project postponements and construction delays.
“With the global economy steadily reopening, central banks continuing to pump up money supply, governments engaging in deficit spending and supply chain disruptions persisting, contractors can expect significant price pressures for months to come,” Basu said. “While materials prices will capture headlines today, construction labor costs are also rising rapidly, further jeopardizing the recovery of nonresidential construction spending during the months ahead.”
ABC is a Washington, D.C.-based national construction-industry trade association representing more than 21,000 members.