Construction material prices rose 0.4% in March and are up 1.7% on a year-over-year basis, according to Associated Builders and Contractors. Prices in March were 41.1% higher than in February 2020.
Nonresidential construction material prices rose 0.4% from February to March and increased 1.7% compared with one year ago. Softwood lumber prices are down 6.8% year over year and up 3.2% from February to March. Iron and steel prices are down 5.9% year over year and 6.9% for the month. Natural gas fell 37% from February to March and is down 43.8% year over year. Crude petroleum fell 0.8% for the month and is up 6.1% year over year.
“There has been growing evidence of resurfacing inflationary pressures in the nation’s nonresidential construction segment during the past two months,” said ABC Chief Economist Anirban Basu. “Were it not for declines in energy prices, the headline figure for construction input price dynamics would have been meaningfully higher. A new set of supply chain issues is emerging, including the cost of insuring ships and bottlenecks in the Red Sea, the Panama Canal and Baltimore.
“This is not especially good news for those who purchase construction services,” Basu continued. “In addition to supply chain issues, there is an abundance of publicly and privately financed megaprojects around the nation, massively increasing demand for certain inputs, and a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index. With continuing wage pressures and elevated borrowing costs, the implication is that financing construction projects will remain expensive relative to historic norms for the foreseeable future.”
