Construction material prices on the rise

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The Bureau of Labor Statistics (BLS) released its Producer Price Index for February on Wednesday. It showed that core inflation for processed goods for intermediate demand was 0.7 percent in February with prices increasing 5.4 percent from a year earlier. However, a closer look at the data show that inflation for construction materials advanced at a faster rate.

Multihousing Pro waded into the tables of data provided by the BLS to select a sampling of the commodities necessary to build an apartment building. The two right hand columns of the table provide the percent change in the price of the commodity from a year earlier (12 Mo PC Change) and the percent change in price from January, 2018 (1 Mo PC Change).

The table shows that prices for soft wood products are surging but that price changes for many other construction materials are relatively moderate. The increase in construction material costs puts further pressure on an industry already beset by a shortage of skilled labor and by the resurgent threat of rent control.