The prices contractors pay for construction materials far outstripped the prices contractors charge in the 12 months ending in September, despite a recent decline in a few materials prices, while delivery problems intensified, according to an analysis by the Associated General Contractors of America of government data released today. Association officials urged Washington officials to end tariffs on key construction materials and take steps to help unknot snarled supply points.
“Construction materials costs remain out of control despite a decline in some inputs last month,” said Ken Simonson, the association’s chief economist. “Meanwhile, supply bottlenecks continue to worsen.”
The producer price index for new nonresidential construction—a measure of what contractors say they would charge to erect five types of nonresidential buildings—rose 5.2% over the past 12 months, despite a decline of 0.9% in the latest month. From September 2020 to last month, the prices that producers and service providers such as distributors and transportation firms charged for construction inputs jumped 17%, Simonson noted.
There were double-digit percentage increases in the selling prices of most materials used in every type of construction with the exclusion of lumber and plywood, which fell 12.3% during the past 12 months.
The producer price index for steel mill products increased by 134% compared to last September. The index for copper and brass mill shapes rose 39.5% and the index for aluminum mill shapes increased 35.1%. The index for plastic construction products rose 29.5%. The index for gypsum products such as wallboard climbed 23%. The index for insulation materials rose 19%, while the index for prepared asphalt and tar roofing and siding products rose 13.1%.
In addition to increases in materials costs, transportation and fuel costs also spiked. The index for truck transportation of freight jumped 15%. Fuel costs, which contractors pay directly to operate their own trucks and off-road equipment, as well as through surcharges on freight deliveries, have also jumped.
Association officials added that many contractors are experiencing extreme delays or uncertainty about delivery dates for receiving shipments of many types of construction materials. The association officials urged the Biden administration to immediately end tariffs on key construction materials. In addition, they asked for an all-out effort to help ports and freight transportation businesses move goods more quickly
“The tariffs on lumber, steel, aluminum, and many construction components have added fuel to already overheated prices,” said Stephen E. Sandherr, the association’s chief executive officer. “Ending the tariffs would help immediately, while other steps should be taken to relieve supply-chain bottlenecks.”
View producer price index data. View chart of gap between input costs and bid prices. View the association’s Construction Inflation Alert.
Related Stories
Healthcare Facilities | Jul 11, 2024
New download: BD+C's 2024 Healthcare Annual Report
Welcome to Building Design+Construction’s 2024 Healthcare Annual Report. This free 66-page special report is our first-ever “state of the state” update on the $65 billion healthcare construction sector.
Contractors | Jul 9, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of June 2024
Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 8.4 months in June, according to an ABC member survey conducted June 20 to July 3. The reading is down 0.5 months from June 2023.
Office Buildings | Jul 8, 2024
Office vacancy peak of 22% to 28% forecasted for 2026
The work from home trend will continue to put pressure on the office real estate market, with peak vacancy of between 22% and 28% in 2026, according to a forecast by Moody’s.
Healthcare Facilities | Jun 25, 2024
Register today! BD+C live webinar: Key Trends in the Healthcare Facilities Market for 2024-2025
Join the Building Design+Construction editorial team for this live webinar on key trends, innovations, and opportunities in the $65 billion U.S. healthcare buildings market. This free live webinar, hosted by BD+C editors, will take place Thursday, July 11 at Noon ET / 11 AM Central.
Apartments | Jun 25, 2024
10 hardest places to find an apartment in 2024
The challenge of finding an available rental continues to increase for Americans nation-wide. On average, there are eight prospective tenants vying for the same vacant apartment.
Contractors | Jun 12, 2024
The average U.S. contractor has 8.3 months worth of construction work in the pipeline, as of May 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator fell to 8.3 months in May, according to an ABC member survey conducted May 20 to June 4. The reading is down 0.6 months from May 2023.
MFPRO+ News | Jun 11, 2024
Rents rise in multifamily housing for May 2024
Multifamily rents rose for the fourth month in a row, according to the May 2024 National Multifamily Report. Up 0.6% year-over-year, the average U.S. asking rent increased by $6 in May, up to $1,733.
Construction Costs | May 16, 2024
New download: BD+C's May 2024 Market Intelligence Report
Building Design+Construction's monthly Market Intelligence Report offers a snapshot of the health of the U.S. building construction industry, including the commercial, multifamily, institutional, and industrial building sectors. This report tracks the latest metrics related to construction spending, demand for design services, contractor backlogs, and material price trends.
Contractors | May 15, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of April 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 8.4 months in April, according to an ABC member survey conducted April 22 to May 6. The reading is down 0.5 months from April 2023, but expanded 0.2 months from the prior month.
Healthcare Facilities | May 6, 2024
Hospital construction costs for 2024
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.