Cost of goods slowing construction in the US

(Photo: NASA Kennedy/flickr)

Across commercial construction in the US, steel price increases in recent weeks have caused contractors to rework the material costs on their jobs. And it’s not just steel, either. Lumber prices, which leaped up toward the beginning of the pandemic before coming back down last summer, have also shot up again recently.

Prices of both lumber and steel — two primary building materials — have surged anywhere from 20% to 25% recently. Over the past year, softwood lumber spiked 73% for January, according to the Producer Price Index. Iron and steel scrap has surged 50.8% in the last 12 months, including a 25.8% jump from November to December, followed by another 20.6% jump from December to January.

A recent National Association of Home Builders analysis found that spikes in softwood lumber prices in the wake of the COVID-19 pandemic have caused the price of an average, new single-family home to increase by nearly $16,000. One high-end custom home builder in Birmingham, Alabama, reported to the NAHB that the price of a lumber framing package on an identically sized home had more than doubled over the past year, from $35,000 to $71,000.

The price gains are having a ripple effect. Construction observers say costs for drywall, copper, steel studs and even vinyl siding have risen, as well as those for other items that include steel.

Read more at The Construction Dive