The continuing rise in the prices of basic materials is hitting contractors across the country, says a new analysis just released by the Associated General Contractors of America.
According to that study, everything from steel to lumber to precast concrete products has seen a price increase since the beginning of the year.
Based on a survey of nearly 1,500 contractors, the AGC analysis notes that the price increases are not only making life difficult for builders, but also “their customers, including hospitals, schools, and other facilities needed to get the economy back on track.”
In a statement, Ken Simonson, chief economist with the AGC, warned that “project owners and budget officials should anticipate that projects will cost more and have longer, perhaps uncertain, completion times, owing to these circumstances that contractors cannot control.”
Overall, prices for materials used in nonresidential construction have jumped by nearly 2% since the beginning of the year. That’s on top of a significantly larger increase of 12.8% since last April.
The analysis additionally shows a 3.0% increase in the price of concrete blocks and bricks; a 3.9% jump in flat glass prices; and massive 36.1% increase in lumber and plywood over last year.
Simonson noted that some 85% of the survey’s respondents said their materials costs had increased since early 2020, with now 58% saying that projects are taking longer to complete than before the pandemic first hit.
“This situation will intensify the cost squeeze apparent in the producer price index data,” Simonson said.
To end or greatly reduce the materials price hikes a large number of industry and labor groups have been calling on the Biden Administration to eliminate a range of trade tariffs that were originally imposed during the Trump presidency.
According to an AGC statement, such eliminations will not only positively impact the price of materials, they will also “help uncork supply-chain bottlenecks.”
By Garry Boulard
