Never Mind Lumber Prices. Steel Mill Products See Highest Spike Among Construction Materials

Lead times to produce and deliver steel mill goods and products have seen the construction materials sector experiencing the biggest jump in prices the past two months, up by 81.3 percent year to date following a 2020 increase of 11.1 percent.

Although the recent drop in softwood lumber prices since mid-May is helping bring costs down (after having driven them up drastically earlier in the year), the decline has been offset by large increases in the prices of several other building material products, reported National Association of Home Builders (NAHB).

“July was the sixth-straight month of double-digit price increases for construction inputs,” Ken Simonson, chief economist at The Associated General Contractors of America, a leading construction association, said last month. “Additionally, lead times to produce or deliver many items keep lengthening. Many reports since the government collected this price data in mid-July show the trend will continue, at a minimum into the autumn and likely beyond, unless tariffs and quotas are removed.”

Tariffs and quotas are artificially inflating the cost of many key materials and doing more damage to the economy than help, Stephen E. Sandherr, AGC’s chief executive officer, said last month.

“Leaving these measures in place will undermine the broader benefits of the bipartisan new infrastructure measure the House should be passing.”

NAHB reported that other products seeing the most increase thus far in 2021 – and all are up at least 30 percent — include:

• Building paper and building board mill products
• Asphalt
• Plastic water pipe
• Fertilizer materials
• Laminated veneer lumber
• Thermoplastic resins and plastics materials
• Structural metal joists and concrete reinforcing bars
• Wood window and door frames
• Copper pipe and tube

During the first seven months of 2021, the majority of these products’ prices have increased many times more than they did in 2020. 

“The prices of a subset of building materials were stable in 2020 but have seen substantial price increases in 2021,” wrote NAHB economist David Logan in this Eye on Housing blog from Sept. 9.

“Some building materials and inputs to building materials have seen especially acute increases over the last three months. Of the goods analyzed here, nine experienced price increases exceeding 20 percent between April and July,” Logan continued.

They include:

• Laminated veneer lumber
• Building paper & building board mill products
• Fertilizer materials
• Plastic water pipe
• Fabricated structural metal
• Other engineered structural wood members
• Copper pipe and tube
• Steel mill products
• Aluminum base scrap