Contractors know about massive price jumps in materials. Still, a new report from the federal government shows that non-residential construction input prices rose 23.9% in May over May of 2020, and the prices rose 4.8% since April.
Crude petroleum leads the price escalation with a rise of 187%, followed by softwood lumber at 154%. Steel rose 76%, wire and cable by 31.4%, fabricated structural metal products by 18.3%, and prepared asphalt and roofing tar by 12.6%.
Associated Builders and Contractors chief economist Anirban Basu said that prices won't drop soon. "While global supply chains should become more orderly over time as the pandemic fades into memory, global demand for inputs will be overwhelming as the global economy comes back to life."
The National Association of Home Builders blames the increase of, on average, $35,872 per new home on the rising price of lumber. In addition, multifamily units show a $12,966 increase, which, the association says, will increase new apartment rents by an average of $119 per month.
The Association of Builders and Contractors' report, the ABC Construction Confidence Index, shows that, despite growing prices, contractors expect sales to rise over the next six months.
According to the National Association of Home Builders, a rise in home construction prices doesn't spell out an ebb in demand for single-family and multifamily units.