{"id":56865,"date":"2018-03-16T14:30:16","date_gmt":"2018-03-16T18:30:16","guid":{"rendered":"https:\/\/www.constructionspecifier.com\/?p=56865"},"modified":"2018-03-16T14:30:16","modified_gmt":"2018-03-16T18:30:16","slug":"construction-costs-spike-amid-rising-price-of-building-materials","status":"publish","type":"post","link":"https:\/\/www.constructionspecifier.com\/construction-costs-spike-amid-rising-price-of-building-materials\/","title":{"rendered":"Construction costs spike amid rising price of building materials"},"content":{"rendered":"
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Ongoing tariffs may raise costs for firms, but many are already locked into fixed-price contracts. <\/span>
Photo \u00a9 BigStockPhoto.com<\/span><\/em><\/figcaption><\/figure>\n

The construction industry experienced a surge in costs last month, which was largely driven by price increases for a wide range of building materials, according to data from the Associated General Contractors of America<\/a>\u2019s (AGC\u2019s) labor department. Association officials caution that the Trump administration\u2019s newly-imposed tariffs on metal imports, such as steel and aluminum, will continue to affect project budgets.<\/p>\n

\u201cPrice increases have accelerated for many construction materials in the last two years, with additional increases already announced and others on the way as soon as tariffs on steel and aluminum take effect,\u201d said Ken Simonson, AGC\u2019s chief economist. \u201cContractors will be forced to pass these cost increases along in bid prices, but that will mean fewer projects get built. Additionally, contractors that are already working on projects for which they have not bought some materials are at risk of absorbing large losses.\u201d<\/p>\n

The producer price index (PPI) for inputs to construction industries\u2014a measure of all goods and services used in construction projects including items consumed by contractors\u2014rose 0.6 percent in February and a total of 4.4 percent over the past 12 months. The index increased by 4.2 percent in 2017, but just 0.9 percent in 2016.<\/p>\n

\u201cMany materials contributed to the latest round of increases,\u201d Simonson continued. \u201cMoreover, today\u2019s report only reflects prices charged as of mid-February. Since then, producers of steel and concrete have implemented or announced substantial additional increases, and the huge tariffs President Trump has imposed will make steel, aluminum, and many products that incorporate those metals even more expensive.\u201d<\/p>\n

Other products important to construction also experienced significant price increases over the past 12 months, according to AGC, including:<\/p>\n