AGC Data DIGest: June 11 to 17, 2021

AGC Data DIGest: June 11 to 17, 2021

The gap between contractors’ costs and prices widened further in May. The producer price index (PPI) for the construction of non-residential buildings – a measure of the price that contractors say they would charge to construct a fixed set of buildings – rose 0.5% from April and 2.8% year-on-year (y / y) since May 2020, as the PPI for materials and service inputs in construction industries jumped 4.3% and 24.3%, respectively, the Bureau of Labor Statistics (BLS) reported Tuesday. An index that measures the price of inputs of goods to all constructions climbed 4.6% for the month and 24.3% y / y; both increases were the largest in the series’ 35-year history. AGC posted the tables and graphics showing the PPIs relevant to the construction. Some year-over-year increases were particularly large due to lower prices in May 2020, but large increases from April to May were also a factor. PPIs that contributed to the increase in inputs include diesel fuel, which climbed 16% in May and 199% year-on-year; lumber and plywood, up 16% and 111% respectively; steel products, 2.4% and 76%; forms of copper and brass mills, 8.0% and 60%; forms of aluminum rolling mills, 2.7% and 29%; plastic construction products, 2.8% and 17.5%; road freight transport, 3.9% and 16%; plaster products, 2.1% and 14%; asphalt felts and coatings, 3.1% and 11%; insulation materials, 2.4% and 7.0%; and clay bricks and tiles, 1.8% and 5.7%.

The prices used to calculate PPIs were generally in effect around May 11. Since then, many more increases have been announced, some taking effect immediately. Gerdau Long Steel North America announced Monday that it is “increasing the transaction price for concrete rebar” by $ 80 per net tonne, “from new orders received today.” This followed an announcement from Commercial Metals Company on June 11 that “Effective immediately, we are increasing the transaction price for reinforcing steel products from our Eastern region plants” by $ 80 / tonne. A reader sent a message on Tuesday that all steel pipe mills had raised prices by $ 125 / tonne. Nucor Buildings Group announced on Tuesday that it “will implement a 12.0% (+/-) price increase on all of our brands, effective on all construction orders listed as of June 29″. An editor of the chemical industry news service CIHI reported various supply chain issues affecting factories producing construction plastics and their ingredients, including a slow recovery from the February freeze in Texas, other plant start-up or production issues and delays that “have been extended due to delays and cancellations by rail and road carriers.” Readers are encouraged to email information on construction costs and supply chain issues to [email protected]

Copper and wood futures on CME’s Comex exchange both fell further this week from all-time highs reached in May. July contracts are down 45% for lumber and 11% for copper from their respective highs. These declines are expected to affect the prices of building materials, but not uniformly and with a lag that depends on demand, production, transport costs and stocks.

“A record 83% of multi-family real estate developers surveyed reported construction delays in the jurisdictions where they operate,” the National Multifamily Housing Council (NMHC) reported June 9, based on its May 17 to June 1 date investigation of 135 companies. “Of that group, 80% said they experienced delays in obtaining permits, up slightly from 77% in the sixth round. [conducted March 27-April 1] and comparable to the results observed in previous cycles. Survey respondents reporting construction delays also indicated a significant pause in start-ups, with a similar 80% still reporting delayed starts more than a year after the start of the pandemic. The top reasons cited for delays in start-ups were licensing, eligibility and professional services (70%); projects that are not economically feasible for the moment (56% [, up from 30% in round six]); and economic uncertainty (27%).

Two housing starts measures (dollars) showed divergent cumulative results for the first five months of 2021 compared to January-May 2020. Total construction starts fell 1% in May at a seasonally adjusted annual rate. , but unadjusted housing starts soar 13% year-to-date, Dodge Data & Analytics reported Wednesday. Non-residential building starts jumped 10% in May, but are down 5% year-to-date (institutional, -9%; commercial, -7%; manufacturing, 42%). Non-construction starts rose 5% over the month and 8% year-to-date (highway and bridge, -10%; environmental public works, 37%; utilities / gas, 25%; miscellaneous , 11%). Residential starts fell 10% in May, but have jumped 30% since the start of the year (single-family, 37%; multi-family, 12%).

Housing starts, not seasonally adjusted, rose 0.5% year-on-year in May from May 2020, when many projects were halted due to the pandemic, according to data firm ConstructConnect reported May 17. Cumulative housing starts from January to May 2021 fell 0.4% compared to the same months of 2020. Cumulative non-residential starts fell 14%: non-residential building starts fell 20% , 5% (commercial, -45%;, -16% and industrial [manufacturing], -17%), while engineering (civil) starts fell 3.8% (including road / highway, -1.3%, and water / sewer, 12%). Residential starts jumped 21% (single-family, 32% and apartments, -2.5%).

Housing starts (units) increased 3.6% at a seasonally adjusted annual rate from April to May and 50% year-on-year from the May 2020 level depressed by the pandemic, according to the Census Bureau reported Wednesday. Year-to-date housing starts for January-May 2021 are up 25% from the same months in 2020. Single-family housing starts are up 4.2% for the month and 31% since the beginning of the year. Multi-unit housing starts (five or more units) rose 4.0% for the month and 12% year-to-date. Residential permits are down 3.0% from April but have jumped 33% year-to-date, with single-family permits down 1.6% for the month but up 38% year-to-date of the year, while multi-family permits were down 7.7% from April but were up 21%. year to date.

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