'Buckling Global Supply Chains, Trade Tensions' Behind Increased Construction Input Prices
Construction input prices rose more than 2% in June, an increase that Associated Builders and Contractors (ABC) states are linked to "global supply chains buckling and trade tensions elevated." According to ABC's latest report, construction input prices rose 2.2%, while nonresidential construction input prices climbed a little higher to 2.3%.
More than half of the 11 subcategories saw price gains in June, most notably crude petroleum, which increased nearly 72% over the prior month. Unprocessed energy materials and softwood lumber increased 16.8% and 11%, respectively, with single-digit increases in prepared asphalt, tar roofing and siding products and fabricated structural metal products. Concrete products remained the same month over month.
"For many contractors, lack of demand for their services has emerged as the leading source of concern due to the COVID-19 pandemic, followed closely behind by a fear of inflation and a potential increase in materials prices," ABC Chief Economist Anirban Basu said in the report. "June's PPI data indicate that they are right to be concerned."
Where there were increases, there were also decreases in pricing, including natural gas, plumbing fixtures and fittings, steel mill products, iron and steel, as well as nonferrous wire and cable.
—Andrew Michaels, editorial associate