Construction Cost Increases
- In an analysis of the U.S. Department of Labor’s producer price indexes and employment cost indexes, the Associated General Contractors of America found that material prices rose nearly 9% from May 2017 to May 2018 — the biggest annual increase in seven years — despite an only 4.2% increase in the price of construction for the same period. In addition, the AGC said the latest price data did not include hikes due to tariffs, which could pinch contractors even more. From April to May, material prices increased 2.2%.
- Construction-related materials that saw a price increase year over year in May included aluminum mill shapes (17.3%), lumber and plywood (13.9%), copper and brass mill shapes (13.8%), steel mill products (10.5%), diesel fuel (44.5%), asphalt felts and coatings (8.9%), ready-mixed concrete (6.5%) and paving mixtures and blocks (5.2%).
- Even though the steel and aluminum tariffs, which went into effect for Canada, Mexico and the European Union on May 31, are not reflected in this latest round of data, the AGC reported that U.S. steel mills have been inundated with orders that exceed capacity. This is likely to create construction delays and force budget overruns, which could lead to cancellation of some projects. Source: ConstrictionDive