The price of materials and services used in nonresidential construction increased 0.5% from March to April, while an index that measures contractors’ bid prices declined 0.3%, according to an analysis by the Associated General Contractors of America of government data. Association officials said the new data indicates contractors are getting squeezed by rising materials prices at a time when what they charge to build projects is declining.
“Prices remain volatile for many key construction materials, making it difficult for contractors to bid projects that may take years to complete,” said Ken Simonson, the association’s chief economist. “Even some materials that have dropped in price recently have still posted year-over-year increases exceeding 10%.”
The producer price index for inputs to nonresidential construction, which is a weighted average of the prices charged by goods producers and service providers such as distributors and transportation firms, rose 0.5% from March to April—the largest increase since January, Simonson noted. Meanwhile, the index for new nonresidential construction—a measure of what contractors report they would charge to put up a specific set of buildings—slipped 0.3%.
As in previous months, price patterns for key construction inputs varied widely in April. Price changes for the month ranged from increases of 15.3% for liquid asphalt and 3.6% for steel mill products to a decrease of 5.9% for asphalt paving mixtures and blocks.
In addition, a diverse range of input prices continued to rise at double-digit cost increases compared to a year ago. Prices jumped 13.7% year-over-year for cement, 13.3% for electrical switchgear, 13.2% for concrete products and 12.1% for gypsum building products.
