Construction Input Prices Increased 19.2% Year-Over-Year, 1.3% For April

Analysis of the U.S. Bureau of Labor Statistics (BLS) of April’s Producer Price Index data provided by Associated Builders and Contractors (ABC) reveal that construction input prices increased 1.3% in April 2021, when compared those of March 2021. Nonresidential construction input prices increased 1.6% in April. Year-over-year construction input prices are 19.7% higher, and nonresidential construction input prices are 19.2%. Year-over-year softwood lumber prices have increased 121.1%. In remarks prepared for the release of the analysis, ABC Chief Economic Anirban Basu said, “Over the past several weeks, the major challenge facing the U.S. nonresidential construction industry has shifted from COVID-19-induced disruptions to the ongoing surge in materials prices. Nonresidential input prices have surged, and much of that increase has occurred since the start of 2021. While some of this is attributable to so-called base effects — the result of unusually low prices that prevailed a year ago for certain commodities — it has become clear that supply is unable to keep pace with rapid demand growth in many instances, driving prices uncomfortably higher.” Basu added, “With the global economy steadily reopening, central banks continuing to pump up money supply, governments engaging in deficit spending and supply chain disruptions persisting, contractors can expect significant price pressures for months to come. While materials prices will capture headlines today, construction labor costs are also rising rapidly, further jeopardizing the recovery of nonresidential construction spending during the months ahead.”