AGC: Prices of non-residential construction inputs rise in April

Prices for materials and services used in nonresidential new construction jumped nearly 21 percent in April from a year earlier, according to an Associated Company of America (AGC) analysis of government data.

The association urges the Biden administration to end tariffs on major building materials and reconsider recently proposed Buy America regulations. The AGC says the regulations will make it more difficult for companies to find and pay for key building materials.

“Non-residential contractors have borne 12 months of 20 percent increases in the cost of items they need to build projects,” says Ken Simonson, AGC’s chief economist. “While they were able to pass on some of these increased costs to customers, most of these increases came from their own profits.”

The producer price index for new non-residential construction inputs – prices charged by producers of goods and service providers such as distributors and carriers – rose 0.8 percent from March to April and 20.9 percent over the past 12 months. The new nonresidential building construction index — a measure of what contractors say they will be forced to build five types of nonresidential buildings — rose 4.1 percent for the month and 19.9 percent from a year earlier.

According to the AGC, a variety of inputs contributed to the increase in the cost index.

The diesel price index jumped 86.5 percent year on year. The aluminum profiles index rose 44.8 percent. The index of architectural coatings, such as paint, grew 32.1 percent.

There were increases of more than 20 percent in the indicators of plastic building products, which rose 29.9 percent; Trucking cargo transportation increased 27.4 percent. steel mill products, up 25.1 percent; Asphalt and tar products accounted for 20.8 percent.

In addition, there have been double-digit increases in several other price indicators that affect construction costs, Simonson notes. He cites, for example, the Insulation Products Index, which rose 19.6 percent in 12 months; Gypsum products, an increase of 17.8 percent. forms of copper and brass mills, which increased by 16.8 percent; and paving mixtures and blocks, up 14.4 percent; and concrete products, up 10.9 percent.

Union officials say the best way to prevent costs from rising further is to allow contractors to purchase materials from the largest possible group of suppliers and eliminate procedures that artificially inflate product costs.

Officials are urging the Biden administration to end tariffs that restrict the supply of steel, aluminum, solar panels and many other products. They are also calling on the administration to reconsider its “Buy America” ​​regulations, which AGC officials say will make it more difficult for companies to find and afford the materials.

“Inflexible tariffs and overly restrictive regulations make it difficult for contractors to find and pay for essential materials,” says Stephen Sandhir, CEO of AGC. “Unnecessarily inflating the cost of construction and leaving less money available to employers to hire new employees is a bad way to rebuild infrastructure or boost the economy.”

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