Construction Input Prices Climb Higher in March

Further analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data, provided by the Associated Builders and Contractors (ABC), reveals that construction and nonresidential construction input prices rose 3.5% in March 2021. Construction input prices are 12.9% higher than in March 2020, and nonresidential construction input prices are up 12.4% during that same span. Year-over-year softwood lumber prices are up 83.4%. However, that pales when compared to crude petroleum which is up 90.6% and natural gas and unprocessed energy materials experienced the largest year-over-year increases, rising 178.3% and 96.7%, respectively. In remarks prepared for this analysis, ABC Chief Economist Anirban Basu said, “Material prices continue to rise. With the global economy reawakening from its slumber, demand for key inputs is expanding. Meanwhile, supply continues to be constrained by many factors, including ongoing concerns regarding worker health, trade disputes, shifting global supply chains and political actions.” Basu concludes, “Intuition suggests that construction input price increases are likely to keep rising.”