Materials Costs Outdistance Finished Building Prices in April
Contractors were able only to partially pass on the costs of rising petroleum and metals prices in April, according to a recent analysis of producer price index figures released by the Associated General Contractors of America. Association officials said the resulting cost squeeze—a result of sluggish demand for construction—will push more construction employees and firms out of work unless public officials act promptly to encourage public and private investment.
“Contractors have been clobbered for several months by double-digit price hikes for diesel fuel, copper and steel products,” said Ken Simonson, the association’s chief economist. “Worse, the price squeeze is hitting many contractors while private demand remains weak, public demand is shrinking and the amount they earn for most publicly funded projects is about to be drastically cut.”