Construction input prices jump in October
The cost of construction continues to rise, driven by rising prices for steel mill products.
Prices for construction inputs rose 1.5% in October, the largest increase since June, according to Associated Builders and Contractors analysis of data from the State Bureau of Labor Statistics Producer Price Index. United published Tuesday. Non-residential construction input prices rose 1.4% for the month.
The prices of construction inputs are 21.1% higher than in October 2020, while the prices of non-residential construction inputs rose 22.3% during this period. The prices of steel mill products have increased 141.6% since October 2020, while the prices of iron and steel are up 101.5%. Softwood lumber prices, which jumped during the pandemic, are now down 19.5% from the same time last year.
“Any idea that the pandemic-induced inflation surge was simply transient has been dropped,” ABC chief economist Anirban Basu said. “Inflation continues to persist, particularly in several commodity categories that have a direct impact on the cost of providing construction services in America. These material price increases are simply mind-boggling, with iron and steel prices rising over 100% in the past year.
“Despite increasing immunization levels, disruptions in the global supply chain persist,” Basu said. “Entrepreneurs should expect high prices until 2022. According to the most recent Confidence in construction index, the average entrepreneur expects profits to decline over the next six months as the combination of high material prices and a continuing shortage of workers conspires to put pressure on margins. “