Construction material costs continue to rise, leaving many contractors in limbo this summer when it comes to starting or continuing projects.
According to the U.S. Bureau of Labor Statistics, prices for nonresidential construction increased 24% in May compared to the previous year. They are up nearly 5% from the month of April.
The price of lumber has shot up 154% over the past year while energy prices have increased a ton as well. Crude petroleum rose 187% while natural gas has increased 90%.
As always, the pandemic is the major driving force behind diminishing supply and increasing costs. Here is a breakdown of material increases.
| Material | 12-month change |
|---|---|
| Plumbing fixtures and fittings | 2.2% |
| Concrete products | 3.1% |
| Prepared asphalt, tar roofing and siding products | 12.6% |
| Fabricated structural metal products | 18.3% |
| Nonferrous wire and cable | 31.4% |
| Iron and steel | 62.8% |
| Steel mill products | 75.6% |
| Natural gas | 90.3% |
| Unprocessed energy materials | 100.1% |
| Softwood lumber | 154.3% |
| Crude petroleum | 186.7% |
The National Association of Home Builders reports lumber costs are adding an average of $35,872 to new single family home prices. Those prices have also added $12,966 to the value of an average new multifamily home which is jacking the average price of rent up about $120 a month.
According to second quarter data from the U.S. Chamber of Commerce Commercial Construction 84% of contractors are facing at least one material shortage.
Materials are not the only thing contractors are short on. There is also a workforce shortage contractors are dealing with. This quarter, nearly 90% of construction companies said they were having trouble finding skilled workers.
As if material and worker shortages aren't enough, contractors are also concerned about the potential effect of tariffs and trade wars over the next three years.
Steel and aluminum tariffs are making it even more difficult for contractors to get projects completed without increasing costs.
Through it all, thick and thin, ConEquip Parts will do what it can to help all its customers with their construction parts needs.
