Building material prices on the rise

Softwood lumber prices rise 9.1% in October, according to the latest Producer Price Index
a wooden bench in front of a building

Construction input prices increased 1.5% in October, according to an Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics’ latest Producer Price Index data.

The prices of goods used in residential construction (excluding energy) climbed 0.8% in October, following two months of declines, the National Association of Home Builders (NAHB) reported. Building material prices have increased 12.2% year to date, after climbing 4.5% over the same period in 2020.

Softwood lumber prices climbed 9.1% in October, marking the first increase since May. In the meantime, softwood lumber prices are now down 19.5% from the same time last year.

Ready-mix concrete climbed 0.6% in October after falling 0.5% in September and is up 4.8% year to date — its largest year-to-date increase in October since 2006. 

Gypsum products increased 2.1% in October — its eighth consecutive monthly increase. Prices have increased 19% year to date.

Steel mill products experienced a smaller gain than the previous two months with a 4.8% increase in October, but prices are still up 116.9% year to date.

Nonresidential construction input prices increased 1.4% for the month., ABC reported.

Construction input prices are also 21.1% higher than in October 2020, while nonresidential construction input prices increased 22.3% over that span. S

“Any notion that the bout of pandemic-induced inflation was simply transitory has gone by the wayside,” said ABC Chief Economist Anirban Basu. “Inflation continues to endure, particularly in multiple commodity categories that directly impact the cost of delivering construction services in America. These materials price increases are simply mind-boggling, with iron and steel prices up more than 100% over the past year.”