Report: Construction materials prices continue on upward trajectory

By |  September 10, 2021


The prices contractors pay for construction materials continued to increase in August while many firms report struggles to get those materials delivered on time, according to an Associated General Contractors of America (AGC) analysis of government data.

AGC officials urge Washington to take steps to help address the challenges impacting the supply chain and driving price escalations.

“July was the seventh straight month of double-digit price increases for construction inputs,” says Ken Simonson, AGC’s chief economist. “Adding to the challenge, contractors are struggling to pass along even a fraction of these added costs onto their clients.”

The producer price index for new nonresidential construction – a measure of what contractors say they would charge to erect five types of nonresidential buildings – rose 5.6 percent over the past 12 months, AGC says.

There were double-digit percentage increases in the selling prices of materials used in every type of construction. The producer price index for steel mill products increased by 123 percent compared to last August, AGC says. The index for lumber and plywood jumped 15.9 percent over the past 12 months. The index for copper and brass mill shapes rose 45.3 percent, and the index for aluminum mill shapes increased 35.1 percent.

The index for plastic construction products rose 29.6 percent. The index for gypsum products such as wallboard climbed 22.9 percent. The index for insulation materials rose 17.2 percent, while the index for prepared asphalt and tar roofing and siding products rose 15.8 percent.

In addition to increases in materials costs, transportation and fuel costs spiked. The index for truck transportation of freight jumped 14.1 percent. Fuel costs, which contractors pay directly to operate their own trucks and off-road equipment, as well as through surcharges on freight deliveries, also jumped.

“Contractors are having to pay more for materials even as it becomes harder to predict when those supplies will show up,” says Stephen Sandherr, AGC’s CEO. “Removing needless measures that are artificially inflating the cost of key materials, such as tariffs, will help employers who are struggling to cover the costs of inflation and uncertainty.”

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Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or

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