May 13, 2021
The Escalating Costs of Construction
Our electrical and lighting biosphere has experienced significant cost increases in recent months. Here’s how we compare with other construction categories.
LIGHTING AND ELECTRICAL PRODUCTS
- Lighting people are well aware of the 10-20+% price increases that many lighting and controls products have seen over the last year.
- We’ve witnessed surging shipping costs for long distance truckloads and overseas containers.
- 12 months ago, a pound of copper was $2.33. Today it is $4.74, an increase of 103%.
OTHER CONSTRUCTION MATERIALS
In the last 12 months these materials have seen huge surges:
- Lumber: +121%
- Steel Mill Products: +67%
- Iron & Steel: +58%
More details below from Associated Builders and Contractors:
Monthly Construction Input Prices Rise 1.3% in April, Says ABC
WASHINGTON, May 13—Construction input prices increased 1.3% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices increased 1.6% for the month.
Construction input prices are 19.7% higher than a year ago, and nonresidential construction input prices expanded 19.2% over that span. All three energy subcategories have experienced significant year-over-year price increases. The price of crude petroleum rose 245.2%, while unprocessed energy materials and natural gas increased 117.7% and 114.6%, respectively. Softwood lumber prices have increased 121.1% over the past year.
“Over the past several weeks, the major challenge facing the U.S. nonresidential construction industry has shifted from COVID-19-induced disruptions to the ongoing surge in materials prices,” said ABC Chief Economic Anirban Basu. “Nonresidential input prices have surged, and much of that increase has occurred since the start of 2021. While some of this is attributable to so-called base effects—the result of unusually low prices that prevailed a year ago for certain commodities—it has become clear that supply is unable to keep pace with rapid demand growth in many instances, driving prices uncomfortably higher.
“Though ABC’s Construction Confidence Index has remained reasonably stable to date, there is growing concern in the industry regarding another bout of project postponements as higher costs induce project owners to delay construction,” said Basu. “With the global economy steadily reopening, central banks continuing to pump up money supply, governments engaging in deficit spending and supply chain disruptions persisting, contractors can expect significant price pressures for months to come. While materials prices will capture headlines today, construction labor costs are also rising rapidly, further jeopardizing the recovery of nonresidential construction spending during the months ahead.”
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