Construction firms are paying more for materials after prices jumped in February, according to an analysis released March 15 by the Associated General Contractors of America (AGC).
The price index for construction inputs rose 0.9 percent in February. That’s more than double its increase from January, when it went up 0.4 percent.
The index is a weighted average of all materials used in construction plus other items used by contractors, like diesel fuel. It rose more quickly than price indexes for finished nonresidential buildings, which measure contractors’ bids.
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The finished nonresidential indexes for warehouse, school, and office buildings did not change in February. The index for industrial buildings decreased 0.2 percent.
“Prices for a wide range of construction inputs rose sharply in February, threatening to put contractors out of business and leave public projects underfunded unless materials can be ordered before prices jump further,” AGC Chief Economist Kenneth Simonson said in a news release. “Contractors had finally begun to cover the modest increases of the last few months, but now many of them are facing increases they may not be able to afford, given the industry’s meager margins.”
Among construction inputs, the price index for diesel fuel climbed 3 percent in February, while the index for wallboard and other gypsum products increased 5.1 percent. The copper and brass mill shapes index jumped up 5.9 percent, the index for architectural coatings swelled 10.5 percent, and the index for steel mill products edged up by 0.6 percent.
The index for aluminum mill shapes rose 1.9 percent and the index for plastic construction products went up 2.3 percent. The index for paving mixtures and blocks increased 2.5 percent, while the index for concrete products declined 0.1 percent.
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