The cost of needed materials for construction projects is showing a continuing increase as 2018 nears its end.
According to a new report just issued by the Associated General Contractors of America, the producer price index for construction materials was up by 0.6 percent last month.
That increase follows a smaller rise from the month before of 0.2 percent. Overall, prices have now risen some 6.6 percent since October of 2017.
The greatest price increases for most of 2018 have been seen in petroleum-based products and metals. Diesel fuel registered a 27 percent price increase in the last 12 months, while the producer price index for steel mill products has gone up just over 18 percent.
In response, contractors and subcontractors, to compensate for the new costs, have raised their project bids, part of a process that experts believe is bound to accelerate in the next few months.
In a statement, Ken Simonson, chief economist with the AGC, said the “tariffs imposed on steel, aluminum, and thousands of Chinese imports are starting to affect the cost of many items used in construction.”
Simonson added that as supplies of construction materials purchased before the spring tariffs of this year were imposed continue to dwindle, “contractors are likely to face even higher costs, which they will need to put into their bid prices if they hope to make any profit on future projects.”
By Garry Boulard
