The cost of goods and services used in construction climbed by a record-setting 4.3 percent in May and 24.3 percent over the past 12 months, according to an analysis by the Associated General Contractors of America of government data released today. AGCA says the increases jeopardize contractorsâ solvency and construction workersâ employment.
âThe increase in producer prices for construction materials over the past year far outstrips contractorsâ ability to charge more for projects,â Ken Simonson, the associationâs chief economist, said in a statement. âThat gap means contractors are being hit with huge costs that they did not anticipate and cannot pass on.â
Items with especially steep price increases over the past year included lumber and plywood; the producer price index for lumber and plywood had a 111 percent increase from May 2020 to May 2021.
Association officials urged the Biden administration to move more quickly to end tariffs and quotas that are adding to construction materials costs and availability problems.
