Construction Inflation Update: In the 27 months Between Feb-2020 and May-2022, the Producer Price Index (PPI) for Construction Materials increased by a whopping 50% (the index went from 235 to 353), which is, by far, the largest such increase since this index has been tracked (1947). Since the May-2022 peak, construction material prices have retracted by approximately 1%, and the index as of April-2024 is 332. In terms of labor, year-over-year wage growth increased from ~2.5% in 2020 to ~6% in 2022 and has since trended back to ~5% in 2024 (still very high historically speaking). It should be interesting to see if labor and material prices continue to pull back as construction demand and oil prices retract (April construction figures showed another month-over-month decline).
Source: fred.stlouisfed.org
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