If it seems like building material prices are still sky high, they are — 39% higher than they were before the COVID-19 pandemic.
Associated Builders and Contractors (ABC) released an analysis today of the U.S. Bureau of Labor Statistics’ Producer Price Index data and pointed out that while month-to-month prices were down 0.3% in November, those prices are still high overall.
According to ABC's analysis:
- Nonresidential construction input prices decreased 0.3% for the month.
- Overall construction input prices are 0.8% lower than a year ago, while
- Overall nonresidential construction input prices are 0.4% lower.
- Prices decreased in two of the three energy subcategories last month.
- Crude petroleum input prices were down 9.5%, while unprocessed energy materials prices were down 3.2%.
- Natural gas prices rose 24.1% in November.
“Construction input prices declined for the second straight month in November,” said ABC Chief Economist Anirban Basu. “While much of the recent decline is due to record domestic oil production and the resulting precipitous decline in gas and diesel prices, other commodities like iron and steel and lumber products are currently more affordable than they were at the same time last year.
“Falling, or at the very least stable, input prices should help to control construction cost increases in the coming quarters,” said Basu. “This is a welcome development for an industry still dealing with extraordinarily elevated financing costs and rising labors costs due to ongoing worker shortages.”