Further, the prospect of additional tariffs imposed by President Donald Trump’s administration may further drive up cost increases. According to the AGC report, the price of goods and services already jumped 6.2% in the past year, adding additional pressure to contractors dealing with “widespread labor shortages.”
A survey from the AGC found 80% of respondents have reported a hard time finding workers to fill hourly “craft workers positions,” with 44% noting the cost of projects are “higher than anticipated.” Further, despite increasing wages and benefits, labor shortages are still widespread and jobs continue to take too long to complete.
“Price changes for construction materials in August were mixed, but contractors are likely to be hit with additional cost increases as new tariffs take hold, as well as significant labor cost escalation,” said Ken Simonson, AGC chief economist. “Prices for goods and services used in construction rose over the past year at nearly double the rate that contractors have raised their bid prices to put up new buildings.”
Simonson said the materials that rose in cost include:
- diesel fuel
- gypsum products
- asphalt paving mixtures