A condominium development under construction in Chelsea in December 2021. Banker & Tradesman file photo
The Associated General Contractors of America has released new data which shows that construction companies are still struggling with the continuous rise of prices for materials and services.
“Christmas trees aren’t the only thing getting more expensive this year,” Stephen E. Sandherr, the association’s CEO, said in a statement. “Construction prices will continue to increase until prices come down a bit more for key materials and services.”
Labor, land and construction materials costs have all risen by 10 percent at the national level in the past year. Contractors must pay a lot more for the materials they need as well as the service they need to finish a job, driving up the cost of developments.
Diesel fuel, which is used to power a lot of the construction machines, leapt by 59.6 percent on a year-over-year basis even after a one-month decline of 3.4 percent in November. This wasn’t the only double-digit increase that happened. The association’s indexes for things like gypsum products – which include ubiquitous items like drywall – had at least an 11 percent increase in their prices.
Prices for new, repair and maintenance work provided by subcontractors also had a big increase in the past 12 months.
“Although inflationary pressures are cooling in some areas, overall costs for construction are still rising at painfully high rates,” Ken Simonson, the Associated General Contractors of America’s chief economist, said in a statement. “In addition, subcontractors are reacting to higher materials and labor costs by raising their prices.”
