The American General Contractors Association (AGC) stated that extraordinary price increases in goods and services in the US construction industry increased the costs of contractors by 26.3% annually.
Union officials warned that many construction companies have difficulty in benefiting from the reopened economy and that the construction sector cannot provide new and high-paid employment due to the increasing material prices. warned of its inability to provide new, high-paying jobs.
“Over the past year, contractors have been negatively impacted by cost increases, supply shortages and shipping difficulties,” said Ken Simonson, AGC’s Chief Economist. However, due to falling demand for construction projects, contractors have not been able to raise their bids sufficiently to recoup their expenditure,” he said. The producer price index for non-residential construction has increased by only 3.4% in the last two months. This increase was only a small part of the 26.3% increase reflected in construction inputs by manufacturers and service providers such as distributors and shipping companies.
It was stated that there were double-digit increases in the sales prices of materials used in all types of construction. The producer price index for timber and plywood has doubled from June 2020 to last month, while lumber prices have fallen since the index calculation. The steel products index increased by 87.5%, the copper and brass alloy index increased by 61.5% and the aluminum alloy index increased by 33.2%. While the index of gypsum products such as gypsum board increased by 18%, the asphalt-bitum roofing and exterior cladding index increased by 12.1 and the insulation materials index increased by 10.1%.