Rising materials prices, flat prices for finished projects squeezing hard-hit construction industry

Construction contractors continue to be squeezed by rising prices for key construction materials and flat prices for what they can charge for finished projects, according to an analysis of October Producer Price Index figures released today [Nov. 16]by the Associated General Contractors of America. Prices for materials used in construction jumped by 0.6 percent in October and 4.8 percent over the past 12 months, while the price index for finished buildings remained flat.

“As if declining demand and dramatic layoffs weren’t enough, the construction industry also has to pay more for key materials while charging the same for finished projects,” said Ken Simonson, the association’s chief economist. “This squeeze is likely to force firms to shut their doors, compounding the already staggering 17.3 percent unemployment rate for the sector,” according to a Nov. 16 AGC of America release.

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