The cost of some construction materials went up in March even though contractor pricing rates remaining largely stagnant, according to the Associated General Contractors of America (AGC). The AGC’s analysis of product price index figures notes that the increase occurred despite limited demand for construction, continuing the concern that current market conditions could force some firms out of business.
“Price shocks for a number of key construction materials may have caught contractors by surprise in a period when overall inflation remained very moderate,” said Ken Simonson, the association’s chief economist. He adds that while the new levels are less drastic that the numbers for March 2011, contractors are having trouble passing these new costs on to customers.
On the whole, the March producer price index for construction materials grew by 1.4 percent over February. Among the category increases, diesel fuel topped a 3 percent increase in February to rise by another 3.5 percent for March, and gypsum wallboard increased by 2.2 percent in March, slowing from its growth of 5.9 percent and 5.1 percent in January and February, respectively.
Residential construction’s producer price index is up 1.1 percent for March over February, slightly below the 1.4 percent same-period increase for the entire construction category; in both cases, the March numbers represent a 3.8 percent increase over March 2011.
