Rising Costs of Materials, Steady Finished Goods Pricing Squeezes Contractors

Nancy Anderson
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Associated General Contractors of America (AGC) in a press release this week stated rather plainly that builders, and the construction industry in general, are being squeezed by a steady rise in the price of building materials, while prices for finished goods have stayed the same. From their press release,

“Unfortunately, demand for construction will likely remain weak for several more months, exacerbating the price squeeze that has already taken a toll on many firms and far more workers.”

AGC is also predicting that this trend will continue well into 2011, and that builders should be wary of spikes in pricing of materials over the course of 2011 as the economy as a whole gradually recovers. Still, the already-elevated price of some essentials are hurting contractors: Diesel fuel is given as an example, up 7.2% in price since September of this year, and up 20% over prices in 2009.

Left unchecked, many contractors and construction companies may be forced to close, adding to the already abysmal 17.3% unemployment in the industry, and further delaying recovery from the recession that’s hit the industry so hard this far.

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Mike Wrightly is mostly diesel fumes and duct tape; he grew up around heavy equipment, and holds a Bachelor's degree in Mechanical Engineering.

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