Construction Contractors Paying 13.6% More for Steel in October
Contractors are paying 6.9% more for their construction materials from a year ago; although, for October, the construction materials costs dropped a minute 0.6%.
According to the Associated General Contractors of America, “the price contractors charge for new nonresidential building construction edged up only 3.3 to 4.3 percent over 12 months, depending on building type.” This means that contractors are not recouping their costs from increases in material costs as they aren’t able to raise prices enough. Another problem contractors are running into is not accounting for such large increases in costs as they guarantee prices to owners in advance, not knowing the materials costs will be much higher.
Ken Simonson, the association’s chief economist, said there is weak demand for construction which means “the price gap is likely contributing to the stagnant employment levels the industry has been experiencing all year.”
However, some key construction materials costs have declined in October such as diesel fuel and copper and brass mills shapes. In contrast, prices for gypsum and steel mill products increased in October. Simonson noted that “steel mill product prices are up 13.6 percent over the past year.”
Source: Associated General Contractors of America