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Mize: Lumber, steel and other building costs are up; this is how inflation starts

Prices for wide-flange steel products, like these girders in a building under construction in Moore, are rising fast, putting the squeeze on contractors, a leading construction trade group says. [THE OKLAHOMAN ARCHIVES]
Prices for wide-flange steel products, like these girders in a building under construction in Moore, are rising fast, putting the squeeze on contractors, a leading construction trade group says. [THE OKLAHOMAN ARCHIVES]

It's not just lumber prices that are skyrocketing and homebuilders who are taking the hit (and passing it along to homebuyers): Costs are soaring for commercial construction as well, hitting general contractors.

This is how inflation starts.

Lumber gets the most attention because it literally hits home, at least for those in the market for a new house. Trade publication Random Lengths reported this week that its framing-lumber composite price hit an all-time high of $963 per 1,000 board-feet. Prices surpassed the record set in September and were more than double from a year ago, said Ken Simonson, chief economist for Associated General Contractors of America.

"Lumber is killing us," said Curt Hellen, president of Stava Building Corp. in Tulsa. "We have a nine-building project in Tulsa that has experienced a massive cost increase, which did initially delay the project from (the fourth quarter of) 2020 to now."

Price increases and long delivery delays are hitting projects already slowed by work crews struck by illness or new jobsite procedures put in place in response to the coronavirus pandemic, according to the AGC.

Rick Scott Construction in Ponca City has absorbed slight cost increases, but "some increases have required clients to pull back on starting the project or tap into other funding for resources," said Stephanie Austin, president and CEO.

Most of the state's general contractors had projects delayed by materials shortages and lumber price spikes, said Douglas Tapp, CEO of Associated General Contractors of Oklahoma-Building Chapter, in Oklahoma City. Other materials have also grown in cost and scarcity, as well, including wood doors, millwork and casework, plywood, light fixtures, sprinkler piping, and finish materials supplied from overseas.

Prices for steel pipe and tube products have gone up 56%, and steel beams have increased 24% since August, Simonson reported in his e-newsletter.

"While these materials are available, lead times for these products have been extended. These increases and extended lead times are forecast to continue into second quarter of the year, potentially further,” Simonson wrote, quoting a reader-contractor.

The selling price for materials and services used in commercial construction increased 2.5% from December to January and 10.7% since April, but what contractors say they would charge to build five types of nonresidential buildings increased just 0.2% over both the past month and since April, the AGC reported separately, citing government data.

Extreme price hike increases "are harming contractors on existing projects and making it difficult to bid new work at a profitable level,” Simonson said. “While contractors have kept bids nearly flat until now, project owners and budget officials should anticipate the prospect that contractors will have to pass along their higher costs in upcoming bids.”

While state and local governments have pulled back building in the face of growing budget deficits, "commercial planning is at its highest level since before the Great Recession," thanks to new warehouse projects and some new office projects, Simonson reported, citing Dodge Data & Analytics.

The AGC said tariffs on lumber, steel and other building materials are contributing to the price hikes, and urged the Joe Biden administration "to rescind these tariffs to provide immediate relief to construction employers caught between stagnant bid prices and rising materials costs," and called on the White House and Congress to review "regulatory impediments" to increased logging and steel production.

"Left unchecked, these rising materials prices threaten to undermine the economic recovery by inflating the cost of infrastructure and economic development projects,” said Stephen E. Sandherr, CEO of the AGC. “Widespread harm is caused by maintaining tariffs on products that so many Americans need to improve their houses, modernize their infrastructure and revitalize their economy.”

Real Estate Editor Richard Mize edits The Oklahoman’s Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Contact him at Please support his work and that of other Oklahoman journalists by purchasing a subscription today at

Richard Mize

Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked... Read more ›