Construction Costs Soared In May

| June 14, 2018

Arlington, VA- Construction costs accelerated again in May, with steep increases for a wide range of building and road materials, including many that are subject to tariffs that could drive prices still higher, according to an analysis by the Associated General Contractors of America of new Labor Department data. Association officials say that the construction industry will bear a heavy share of the tariffs’ costs.

From May 2017 to May 2018, the producer price index jumped by 17.3 percent for aluminum mill shapes, 13.9 percent for lumber and plywood, 13.8 percent for copper and brass mill shapes and 10.5 percent for steel mill products. Other construction inputs that rose sharply in price from May 2017 to May 2018 include diesel fuel, 44.5 percent; asphalt felts and coatings, 8.9 percent; ready-mixed concrete, 6.5 percent; and paving mixtures and blocks, 5.2 percent.

The U.S. imposed steel and aluminum tariffs on imports from Canada, Mexico and the European Union on May 31. The impact from these tariffs is not reflected yet in the most recent data.

The producer price index for inputs to construction industries, goods—a measure of all materials used in construction projects including items consumed by contractors, such as concrete products—rose 2.2 percent in May alone and 8.8 percent over 12 months. The year-over-year increase was the steepest since July 2011, the economist noted.


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