AGC warns on rising materials prices

A +0.7% rise between December and January in the prices paid for construction materials in the US has led the Associated General Contractors of America (AGC) to warn on a potential inflation spike for the industry. Construction materials prices were up +1.3% in January compared to a year ago – a similar level to consumer inflation.

AGC chief economist Ken Simonson said, “Contractors had to contend with huge leaps in prices for gypsum, wallboard and lumber as well as significant increases in the cost of insulation and architectural coatings such as paint. Based on pump prices for diesel fuel and price announcements by various manufacturers, it is clear that costs are rising significantly higher in February.”

The producer Price index for gypsum product, which includes plaster and palst3er board, climbed +11.8% in January, and was up +20.4% compared to a year ago. Lumber and plywood prices are +15.1% higher than a year ago, while the cost of insulation is up +5.4%. According to the AGC, price increases in these areas will impact particularly on contractors working in residential construction.

However, the last 12 months has also seen some prices fall, including those for various steel products and for asphalt.