Stephen Sandherr

Some Material Prices Down, Construction Costs, Diesel Still Climbing

Published on

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Although the price of copper and brass has decreased slightly, the cost of gypsum, concrete and diesel fuel are still headed upward, according to the Associated General Contractors of America.

AGC Chief Economist Ken Simonson says numbers reported on July 14 show that nonresidential construction costs – material and services – rose 1.1 percent for the month of June.

“Some materials prices have fallen recently, but others appear headed for further increases,” he said. “In addition, the supply chain remains fragile and persistent difficulties filling job openings mean construction costs are likely to remain elevated despite declines in some prices.”

The producer price index for inputs to nonresidential construction – the prices charged by goods producers and service providers, such as distributors and transportation firms – jumped 1.1 percent from May to June 2022 and increased a total of 16.8 percent since June 2021. Meanwhile, the index for new nonresidential building construction – a measure of what contractors calculate they would charge to erect five types of commercial/industrial buildings – climbed by 0.5 percent from May to June this year and a cumulative 19.8 percent over the past 12 months.

Add to that the soaring cost of diesel fuel, which jumped 14.1 percent in June and has more than doubled over the past 12 months, and you have a recipe for continued price pressure on the cost of future construction projects, according to the AGC.

“The more materials prices increase, the harder it will be for public officials to build new schools, roads and other infrastructure,” said AGC CEO Stephen Sandherr, whose organization is urging the Biden administration to remove remaining tariffs on a range of construction materials. The AGC is also asking public leaders at all levels to do what they can to help unclog backed-up supply chains. “Taking steps to address rising materials prices will help construction employers and taxpayers alike.”

You might be interested in

AGC Opposes PRO Act, Says Legislation Would Overturn 70 Years of Precedent

Published on

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

The Associated General Contractors continues to oppose the PRO (Protecting the Right to Organize) Act, H.R. 842, legislation seeking to change dozens of longstanding labor laws regarding collective bargaining.

AGC of America CEO Stephen Sandherr says the legislation, which the U.S. House of Representatives passed 225-206 back in March, remains in the U.S. Senate Committee on Health, Education, Labor and Pensions where it has been for nearly four months. Backed by the AFL-CIO, the bill provides for conditions that would strengthen unions’ leverage in collective bargaining with union construction companies and in efforts to unionize open-shop firms. H.R. 842, if passed in the Senate and signed into law by President Joe Biden, would also require employers to divulge private information about their employees and remove prohibitions on partial strikes, slowdown strikes and intermittent strikes.

“On its face, the PRO Act seems to be a rather limited application,” said Sandherr. “But in reality, the bill goes way beyond that. This is the most aggressive and ambitious menu of changes to federal labor law ever offered by the AFL-CIO. It would overturn over 70 years of precedent.”

Under H.R. 842, secondary boycotts – boycotts allowing unions to picket against any employer regardless of whether they are directly involved in a dispute with that union – would be allowed, according to Sandherr.

“This measure means many workers could be idled for a dispute in which they do not stand to benefit,” he said.

The PRO Act also includes a provision related to employee classification that takes aim at the use of independent contractors. “This would make it extremely difficult for entrepreneurial construction industry workers to establish their own businesses,” Sandherr said.

AGC of Missouri President Leonard Toenjes says unless the Senate’s filibuster rule is altered, the PRO Act will likely remain in committee.

You might be interested in