With new tariffs imposed on imported steel and aluminum, the cost of construction materials rose again in June.
The cost of inputs to the construction industry increased by 9.6 percent on average from June 2017 to June 2018, according to a statement Wednesday from the Associated General Contractors of America. Meanwhile, the price index for new construction – a measure of what contractors are charging to build projects – was up only 4.3 percent.
Ken Simonson, AGC chief economist, said the figures imply “that contractors’ profit margins are shrinking as they absorb some of the increased costs.”
AGC officials said the U.S.’s new tariffs on steel and aluminum are likely helping drive costs higher. Tariffs on steel and aluminum imported from Canada, Mexico and the European Union took effect on May 31. Tariffs on more than $200 billion worth of Chinse goods have since been announced.
From June 2017 to June 2018, the producer price index went up by 20 percent for aluminum-mill shapes, 17.4 percent for copper- and brass-mill shapes and 12.3 percent for steel-mill products.