The price of materials and services used in non-residential construction fell 1.1% from July to August, as the sharp drop in fuel prices masked the increase in the cost of other construction inputs, according to an analysis of government data. of the Associated General Contractors (AGC).
Association officials warn that limited price cuts cannot undo the damage caused by clogged supply lines and labor shortages.
“[This] The price report highlights the mixed conditions facing contractors, with many costs still rising sharply while others are taking a breather,” says AGC Chief Economist Ken Simonson. “Meanwhile, an industry survey we recently released found that supply chain issues and labor availability are holding up many construction projects.”
The survey, which the association conducted with Autodesk, asked construction companies about the impact of shortages and delivery delays on project turnaround times, among other topics. Eighty-two percent of companies said projects were delayed due to longer lead times or shortages of materials, while 66% reported delays due to shortages of employees or sub – contractors.
The producer price index for non-residential construction inputs – prices charged by producers of goods and service providers such as distributors and transportation companies – fell 1.1% from July to August, but was up 13% year-over-year.
The index for energy used in non-residential construction fell 13.1% for the month. In contrast, the index for goods other than energy and food rose 0.3% in August after falling the previous two months. The services index was also mixed, with an overall decline of 0.4% but with a 1.2% increase in the index for services other than trade, transport and warehousing.
Prices for several everyday goods rose in August, partially offsetting lower prices for fuel, lumber and some metal products.
The price index for gypsum building materials such as wallboard jumped 3.3% for the month. The indices increased for construction machinery and equipment (2.6%), flat glass (2.4%), copper and brass profiles (2%), ready-mixed concrete (1, 6%) and asphalt mixtures and blocks (1%). Among services, the price index for equipment rental and leasing rose 3.7% in August.
These increases were more than offset by month-over-month declines in August in the index for diesel fuel (down 13.4%), steel products (down 5.7%), aluminum shapes (down down 3.9%) and lumber and plywood (down 2.9%). percent). Falling fuel prices contributed to a 1.9% decline in the trucking freight index.
AGC officials say supply chain disruptions, such as a possible railway strike, as well as a shortage of skilled construction workers, threaten to delay and increase the cost of infrastructure and manufacturing construction essential. They urge public authorities to help maintain freight transport and invest in workforce development.
“Drops in material costs mean little if neither goods nor workers are available,” says AGC CEO Stephen Sandherr. “Federal officials must do all they can to eliminate supply bottlenecks and invest in construction education and training programs.”