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Construction Material Prices are on the Rise


There has been continuous uncertainty within the U.S. in recent months about economic policies and trade with partners throughout the world. One of the more impactful policy changes is the introduction of tariffs on imports, which were announced in March. The tariffs, which include up to 25% tacked on to purchases of foreign steel, have recently enabled domestic producers and suppliers to raise prices without the fear of foreign competitors providing a lower price. These increased prices have placed immediate pressure on contractors who have faced shrinking margins on budgets already tight due to competition and other market factors.

Steel isn’t the only material that has seen rising prices. In June, the Associated Builders and Contractors, Inc. performed an analysis of U.S. Bureau of Labor Statistics data, revealing that overall construction prices rose a whopping 9.6% year-over-year from June 2017. This includes increases in lumber, steel, and iron. According to the study, a myriad of factors have contributed to this, including federal policymaking as well as increased oil prices during that time. Economists are growing wary of these trends, as a similar increase in prices occurred in 2006 and 2007, just before the last economic downturn. While ABC believes prices in the U.S. will continue to rise as a result of disputes with top trade partners, it does believe that the current rate is unsustainable, and that increases will be more manageable in coming months.

We will continue to monitor the effects of rising prices on contractors and provide any updates as they arise.


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