Builders continue to battle high costs in construction materials despite recent price reductions for certain items. Diesel, steel, and copper costs went down in August according to the product price index released by the Associated General Contractors of America (AGC). This should give contractors some relief, but prices likely will remain unpredictable throughout the year, notes Ken Simonson, the AGC’s chief economist. He adds that the fees builders are charging for new construction are nowhere close to being on par with the average annual building material increases, mainly because construction demand remains weak. For example, new construction prices rose 2.1 percent to 3.2 percent, while steel prices increased 14.3 percent last year. “The disparity between contractors’ materials costs and their selling prices threatens to push some firms and their hard-pressed workers out of business,” Simonson explains. “Contractors just aren’t catching any breaks when it comes to current market conditions.”
Prices Drop on Steel, Diesel, and Copper
Although the cost for key construction materials dropped in August, it has risen nearly 8 percent for the year.
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