The continued rise in materials prices continues to plague the construction industry, according to a new report issued by the Associated General Contractors of America.
Materials prices overall have seen a nearly 13% jump between March of 2020 and March of this year.
Noting also a 3.5% jump in prices since February, the AGC notes that both price index increases “were the highest recorded in the 35-year history of the series.”
The increases, ironically, come as the industry is feeling more bullish regarding business in general, notes the publication Construction Dive.
“To build things, contractors need willing owners to finance them,” continues the publication, adding that those owners may prove harder to come by in an environment dominated by delays in the global supply chain and extended delivery times.
A county contractor in Lincoln, Nebraska is reporting a 300% increase in steel prices; in Michigan, the cost of lumber is up by nearly 250%; while a Nashville construction company has seen a doubling of lumber prices this spring.
In Arizona, lumber prices have roughly tripled, prompting some projects to be put on hold.
According to the latest Producer Price Index released by the Bureau of Labor Statistics, softwood plywood products nationally are up by over 101% in the last months, followed by softwood lumber with an 83% jump.
Copper wire and cable saw a nearly 27% jump between February and March; with hot rolled steel bars up by 20.3%.
Compounding the problem is the availability of materials: A survey issued by Dodge Data & Analytics notes that some 71% of responding contractors said they are currently experiencing difficulty getting materials.
The survey also notes that the “supply chain challenges may suggest long-term effects that are harder to rectify.”
For all of that, continues the Dodge survey, some 65% of civil contractors are optimistic about the ability of the market to provide new work, up from 58% from the last quarter.
Meanwhile, according to the National Association of Home Builders, the materials price jump has now led to a nearly $36,000 increase in the price of the average new single-family home.
The lumber price hike, adds the NAHB, “has also added nearly $13,000 to the market value of an average new multifamily home.”
By Garry Boulard
