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U.S. Construction Material Cost Shock Escalates

March 18, 2021

At the same time as the depth of the nonresidential construction marketplace in the U.S. has become shallower, i.e., there are fewer projects out for bidding due to cutbacks in capital spending plans forced by the coronavirus contagion, material input costs have been escalating.

Table 1 shows the extent of the cost shock. The table pulls its information from the monthly Producer Price Index series published by the Bureau of Labor Statistics.

Bolstered by renovation projects undertaken by stay-at-home workers and by strength in one of the few corners of the construction marketplace that has remained bullish, single-family housing activity, lumber and related product prices have been soaring.

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