Financial pressures on contractors worsened in February as prices for construction materials rose as prices construction firms charge for completed projects remained stagnant, according to a report by the Associated General Contractors of America (AGC).

The price squeeze will make it harder for the construction industry to recover, association officials said.

"With construction spending hovering near a 10-year low, contractors are holding bids steady even while being hit with staggering price increases for key inputs," said Ken Simonson, the association’s chief economist. "That combination threatens to add to an already appalling toll of laid-off workers and shuttered construction firms."

Materials prices used in construction rose 6.1 percent in February compared to the same time last year and 1.1 percent from the previous month, according to the report. Price indexes for finished buildings stayed nearly level during the same timeframe, with construction costs rising 5.6 percent since February 2010.