An Associated Builders and Contractors analysis of information provided by the Bureau of Labor Statistics shows construction material prices fell 0.5% from August to September, according to www.abc.org. On a year-over-year basis, the price of construction materials increased 18.9%.
Nonresidential construction material prices fell 0.4% from August to September and increased 20.2% compared with one year ago. Softwood lumber prices are down 31.4% year-over-year and down 4.3% from August to September. Iron and steel prices are up 96.3% year-over-year and 3% for the month.
ABC Chief Economist Anirban Basu said contractors should expect prices to rise during the upcoming months amid global supply chain disruptions and surging transportation costs, which will put additional upward pressure on input prices.
“For months, many economists, including certain Federal Reserve officials, have been indicating that inflation is merely transitory,” Basu said. “This statement is likely correct, but elevated prices have already lingered far longer than those economists had anticipated. The recent surge in energy prices strongly suggests that contractors, consumers and other economic actors will be wrestling with inflationary pressures for much of 2022.
“Contractors should always be careful with respect to their contractual obligations,” Basu continued. “But the current period is one that requires greater care and caution than usual. Input prices are likely to remain volatile, and shortages of key materials and equipment will continue to result in project delivery delays. Accordingly, contractors need to be especially focused on limiting their financial and legal exposure during a period sure to be associated with price volatility and supply chain challenges.”