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Inflation is hitting the buildings market just as hard if not harder than everywhere else. Construction material prices rose 20 percent between January 2021 and January 2022, according to analysis of government data by the Associated General Contractors of America (AGC).
According to the organization’s latest Construction Inflation Alert, “Unprecedented increases in materials costs, supply-chain disruptions, and an increasingly tight labor market have made life difficult for contractors and project owners alike.”
The price index for steel is the highest contributor to the overall cost of construction materials, itself rising 112.7 percent in the last 12 months. The price index for plastic rose 35 percent and architectural coatings rose 24.3 percent. Lumber and plywood rose 21.1 percent.
“Spiking materials prices are making it challenging for most firms to profit from any increases in demand for new construction projects,” said Stephen E. Sandherr, said AGC’s chief executive officer in a release. “Left unabated, these price increases will undermine the economic case for many development projects and limit the positive impacts of the new infrastructure bill.”
Greg Zimmerman is editor, Building Operating Management magazine and FacilitiesNet.com.