Expensive construction materials contribute to high housing prices and labor costs. These five reasons offer a brief explanation why material prices are continuing to rise in December.
A hike in steel and aluminum tariffs forces contractors to increase bid prices. As a result, less projects get built. Contractors who have already set a price with their clients and begun a project risk absorbing large losses.
2.Rising Fuel Prices
Materials often have to get transported across the country to reach their destination. Hefty fuel costs for cars and airplanes cause contractors to pay more for their materials.
3. Shortage of Skilled Craftsmen
Companies have to offer a good wage to their workers to stay competitive in the marketplace. A reported shortage of labor means there are less people available to complete projects, which can result in longer days with overtime pay. These costs trickle down to people who buy the materials.
4.Increased Costs for Chinese Imports
A recent federal ruling imposed a 10% tariff on billions of dollars of Chinese goods, including many construction materials. The tariffs are scheduled to increase to 25% in the upcoming year.
Steep price increases across the board means less funds to invest. Companies aren’t purchasing as many new equipment; instead, they’re relying on older models that don’t work as efficiently and take longer to create materials.
Understand Your Industry
Understanding why the cost of construction materials is rising and how long the trend might last can help you make informed decisions for your business. Joining an association of construction professionals is a great way to network with and stay on top of changes in the economy. Updates are often accompanied by metrics and statistics to give you a clear picture of what’s going on.
ABC Baltimore is proud to be one of the chapters of the Associated Builders and Contractors (ABC). Contact us today at 410-821-0351 to discover how you can open doors of opportunity for your enterprise.