Contractors caught between rising materials costs and stagnant prices

Construction contractors continue to be squeezed between rising materials costs and falling output prices according to a new analysis of materials costs conducted by the Associated General Contractors of America. The association noted that even as the producer price index leapt in April for key construction components, the amount contractors charge for construction services remains depressed.

“Paying more to earn less is not a sustainable business model,” said Ken Simonson, chief economist for the Associated General Contractors of America. “Contractors are not going to be able to sustain the low prices they have been charging for much longer,” according to a May 18 AGC of America release.

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