Construction material prices rose 1.9% in June and are up 20.1% on a year-over-year basis, according to www.abc.org.
Nonresidential construction material prices rose 1.8% from May to June and increased 20.3% compared with one year ago. Prices fell in four of 11 subcategories. Softwood lumber prices are down 38.1% year-over-year and down 24.8% from May to June. Iron and steel prices are up 16.3% year-over-year and down 2.9% for the month. Natural gas rose 24.3% from May to June and is up 517.9% since February 2020. Crude petroleum rose 19.4% for the month and is up 152.6% since February 2020.
“It’s no secret that contractors and their customers have been walloped by massive increases in construction materials prices,” said Associated Builders and Contractors Chief Economist Anirban Basu. “That inflation continued through June, as reflected in the decline in profit margin expectations seen in the most recent reading of ABC’s Construction Confidence Index. But more recently, key commodity prices have declined, so it may be possible we have achieved peak inflation.
“Indeed, with much of the world at risk of recession, there is likely to be further downward pressure on commodity prices going forward,” Basu continued. “Oil prices had been in the range of $120/barrel recently. As of this morning, the price of oil has dipped into the low $90s. Similarly, natural gas prices have been in decline. In part, this may be because global supply chains are readjusting to disruptions caused by the Russia-Ukraine war. The war creates an ongoing risk of sudden spikes in certain commodity prices, but we appear to be entering a new phase in input price trajectory.”