The construction industries’ Producer Price Index (PPI) rose by 24.3pc in May against the previous year and by 4.3pc from the preceding month, according to the Associated General Contractors of America (AGC).
The association stated that the high costs are jeopardizing contractors’ solvency and urged the Biden administration to move quickly to end aluminum, lumber, and steel tariffs and quotas to reduce costs and improve materials sourcing.
Ken Simonson, the association’s chief economist, noted that contractors could not pass on the additional costs to consumers, especially, as most were contracted agreements.
The PPI for inputs to new non-residential construction rose by 22.2pc, new residential construction increased by 25.4pc, and maintenance and repair construction grew by 24.5pc in May, against the same year-ago month. Truck transportation PPI rose by 15.8pc last month against May 2020.
Compared to the same month last year, the PPI for May 2021 plastic construction products rose by 17.5pc, lumber and plywood increased by 111pc, steel mill products grew by 75.6pc, steel pipe and tube rose by 29.3pc, copper and brass mill shapes rose by 60.4pc, aluminum shapes increased by 28.6pc, sheet metal products climbed by 12.2pc, and fabricated structural metal grew by 30pc.
The PPI rose by 76.6pc for iron and steel scrap, grew by 53.6pc for stainless and alloy steel scrap, and increased by 89.6pc for copper base scrap, in May against the prior-year month.
AGC also noted that the present US administration proposal for Supply-Chain Relief will impose unnecessary restrictions on hiring, training, and workforce and does not focus on the more immediate problem of cost and supply of materials. The association also noted that these latter challenges will make the infrastructure, renewable energy, and affordable housing efforts more costly.
The unpredictable and longer delivery times for necessary materials resulted in 20,000 workers in the construction industry being laid off in May.