State of the Construction Industry: October 2021…

Amazing! State of the Construction Industry: October 2021…

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Phil Puccio

Material costs and supplies are at a tipping point at a crisis level for the construction industry.

According to recent data from the Associated General Contractors of America Contractors paid significantly higher prices for building materials in the past 12 months than the prices they charged for construction projects and construction contracts.

The association found that the prices charged by producers and service providers such as traders and transport companies for construction services rose by 17% from September 2020 to last month. The producer price index for new construction of non-residential buildings – a measure of what contractors would charge to build five types of non-residential buildings – rose by 5.2%.

“Building materials costs remain out of control despite a decrease in some inputs over the past month,” said Ken Simonson, AGC’s chief economist. “Meanwhile, delivery bottlenecks are worsening.”

The AGC, along with other construction organizations, is calling on the White House to end trade tariffs with other countries – many of them enacted during the previous administration – and to take steps to help shipping ports, transportation companies and more overcome current supply chain backlogs.

Take away: Rising material costs and problems in the supply chain, as well as labor challenges, have had a crippling effect on the construction industry. Hopefully government action will help, although ultimately many of these cost and supply issues are related to the pandemic itself. Because of this, many contractors have updated their operating software and technologies to make them more agile and efficient in terms of manpower, equipment and materials. Real-time data and tracking, cloud-based workflows, and more help contractors not only avoid wasted materials, but also find the best prices available to them from larger pools.

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Original Source: https://www.viewpoint.com/blog/state-of-the-construction-industry-october-2021-roundup
Category – Construction

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