Construction material prices are 23.7% higher than a year ago

May 17, 2022

Construction material prices rose 0.8% in April and are up 23.7% on a year-over-year basis, according to www.abc.org.

Nonresidential construction material prices rose 0.9% from March to April and increased 24% compared with one year ago. Softwood lumber prices are down 5.5% year-over-year and 17.7% from March to April. Iron and steel prices are up 25.3% year-over-year and up 1.2% for the month. Natural gas rose 16.9% from March to April and is up 243.2% since February 2020. Crude petroleum climbed 4.5% for the month and is up 113.4% since February 2020.

“There are some economists who believe that inflation has peaked,” said ABC Chief Economist Anirban Basu. “Even if that were true, stakeholders should not expect dramatic declines in inflation in the near term given an array of factors placing upward pressure on prices: the Russia-Ukraine war, COVID-19, a shrunken labor force, elevated transportation costs and abundant demand for goods. Today’s PPI release indicates that producers continue to ask for and receive elevated prices for their limited production. These high input prices will continue to circulate through the economy as production continues, whether in the form of manufactured goods, buildings or infrastructure.

“According to ABC’s Construction Confidence Index, many contractors report that demand for their services remains sufficiently robust for them to pass along the bulk of their cost increases to project owners,” Basu continued. “But at some point, the economy could weaken to the point that purchasers of construction services become less willing to pay elevated prices.”

Tags: Trends

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