National/International

Construction Costs Climbed In March

Arlington, VA – According to an analysis by the Associated General Contractors of America of Labor Department data recently released, construction costs climbed again in March. There were increases for a wide range of building materials, including many that are subject to proposed tariffs that could drive prices still higher and cause scarcities.

From March 2017 to March 2018, the producer price index jumped by 13.7 percent for lumber and plywood, 11.4 percent for aluminum mill shapes, and 4.9 percent for steel mill products. The U.S. has been in a dispute with Canada over lumber imports, has imposed tariffs on several types of steel and has announced or recently imposed an additional tariff, not reflected in the March price index, on steel, aluminum, and numerous Chinese construction products.

Other construction inputs that rose sharply in price from March 2017 to March 2018 include diesel fuel, 39.7 percent; copper and brass mill shapes, 11.2 percent; gypsum products, 8.4 percent; and plastic construction products, 5.8 percent. In addition, concrete and other suppliers announced significant price hikes that were due to take effect in April.

 

Construction officials said the tariffs that have been announced have already triggered a surge of orders that mills say they cannot fill on a timely basis, which will create budget problems, delays and possibly cancellations for infrastructure and other public projects. They said adequate funding of infrastructure would be a better way to foster demand for domestic steel and aluminum without harming contractors.

“Tariffs will harm contractors that are currently working on projects for which they have not bought materials and will disrupt budgets for future construction,” said Stephen E. Sandherr, the association’s chief executive officer. “The best way to help the U.S. steel and aluminum sector is to continue pushing measures, like regulatory reform and new infrastructure funding, that will boost demand for their products as the economy expands.”