The prices of various construction materials increased by 6.2 percent between August 2017 and August this year.
Officials at the Associated General Contractors of America reported on Wednesday that the increase will continue to put pressure on contractors who are already feeling squeezed by a persistent labor shortage. They also noted that contractors’ bid prices have not kept pace with the increases in materials prices.
“Price changes for construction materials in August were mixed, but contractors are likely to be hit with additional cost increases as new tariffs take hold, as well as significant labor cost escalation,” said Ken Simonson, AGC chief economist. “Prices for goods and services used in construction rose over the past year at nearly double the rate that contractors have raised their bid prices to put up new buildings.”
The 6.2 percent increase seen for construction materials between August 2017 and August this year appeared in the producer-price index for inputs to the construction industry, which takes into account all goods and services used in construction, including diesel fuel. In the same time period, an index measuring what contractors say they would charge to put up five types of nonresidential buildings went up by 3.4 percent, suggesting contractors are absorbing more of the rising input costs than they are passing on to owners.
From August 2017 to August this year, the producer-price index showed increases of 33.9 percent for diesel fuel, 18.6 percent for steel mill products, 14.0 percent for aluminum mill shapes, 9.2 percent for asphalt-paving mixtures and blocks and 8.2 percent for gypsum products.