Prices Continue to Rise

June 22, 2021 – In its first quarter report, Vulcan Materials noted, “The pricing environment continues to be positive across the company’s footprint as demand visibility continues to improve. For the quarter, freight-adjusted pricing increased 2% (mix-adjusted pricing increased 1.3%). Mix-adjusted pricing improved sequentially in March, reflecting recently announced price increases in certain key markets. Prices are expected to continue to increase sequentially during the remainder of the year.” In its first quarter report, Martin Marietta Materials noted, “Pricing increased 3.4%, or 2.5% on a mix-adjusted basis. East Group pricing increased 3.9%, with improvements in both the East and Central divisions. West Group geographic mix limited pricing growth to 1.9%.”

In fact prices are rising all over. According to Ken Simonson, chief economist for Associated General Contractors (AGC), the gulf between contractors’ costs and pricing widened again in May. The producer price index (PPI) for nonresidential building construction – a measure of the price that contractors say they would charge to build a fixed set of buildings – increased 0.5% from April and 2.8% year-over-year (y/y) since May 2020, while the PPI for material and service inputs to construction industries jumped 4.3% and 24.3%, respectively, the Bureau of Labor Statistics (BLS) reported. An index that measures the price of goods inputs to all construction soared 4.6% for the month and 24.3% year-over-year; both increases were the largest in the 35-year history of the series. 

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