Report: Some material prices drop, but supply issues persist
The prices that contractors pay for building materials have far exceeded the prices charged by contractors in the 12 months ending in September, reports the Associated General Contractors of America (AGC).
This trend continues despite a recent drop in the prices of a few materials, says AGC – and all as delivery problems have intensified.
AGC, which has conducted an analysis of government data to identify this continuing trend, is urging Washington officials to end tariffs on major building materials and take action to help unravel booming supply points.
“The costs of building materials remain out of control despite a drop in some inputs last month,” said Ken Simonson, chief economist of AGC. âMeanwhile, supply bottlenecks continue to worsen. “
According to AGC, the producer price index for new non-residential construction – a measure of what contractors say they would charge to erect five types of non-residential buildings – rose 5.2% over the past 12 years. recent months, despite a 0.9% drop last month. From September 2020 to September 2021, prices charged by producers and service providers, such as distributors and transport companies, for construction inputs jumped 17%, says Simonson.
AGC has identified double-digit percentage increases in the selling prices of most materials used in all types of construction over the past 12 months, with the exception of lumber and plywood, which fell 12.3 percent.
The producer price index for steel products rose 134% from September 2020, according to AGC. The index of copper and brass rolling mill shapes increased by 39.5% and the index of aluminum rolling mill shapes increased by 35.1%.
The index of plastic construction products rose 29.5%. The index for gypsum products such as wall panels climbed 23%. The insulation materials index increased 19%, while the prepared asphalt and tar roofing and siding products index increased 13.1%.
In addition to increases in material costs, transportation and fuel costs have also skyrocketed. The road freight transport index jumped 15 percent. Fuel costs, which contractors pay directly to operate their own trucks and off-road equipment, as well as surcharges on freight deliveries, have also jumped.