Prices of construction materials jumped more than 20 percent from January  2021 to January 2022, according to an analysis of government data by the Associated General Contractors of America. The association recently posted a new edition of its Construction Inflation Alert, a report to inform project owners, officials, and others about the challenges volatile materials costs, supply chain disruptions, and labor shortages posed for construction firms.

“Unfortunately, there has been no letup early this year in the extreme cost runup that contractors endured in 2021,” said Ken Simonson, the association’s chief economist. “They are apparently passing on more of those costs but will have a continuing challenge in getting timely deliveries and finding enough workers.”

The producer price index for inputs to new nonresidential construction—the prices charged by goods producers and service providers such as distributors and transportation firms—increased by 2.6 percent from December to January and 20.3 percent over the past 12 months. In comparison, the index for new nonresidential construction—a measure of what contractors say they would charge to erect five types of nonresidential buildings—climbed by 3.8 percent for the month and 16.5 percent from a year earlier.

A wide range of inputs contributed to the more than 20 percent jump in the cost index, Simonson noted. The price index for steel mill products soared 112.7 percent over 12 months despite declining 1.6 percent in January. The index for plastic construction products climbed 1.8 percent for the month and 35.0 percent over 12 months. The index for diesel fuel jumped 5.1 percent in January and 56.5 percent for the year. The index for aluminum mill shapes jumped 5.6 percent in January and 32.7 percent over 12 months, while the index for copper and brass mill shapes rose 4.1 percent in January and 24.8 percent over the year. Architectural coatings such as paint had an unusually large price gain of 9.0 percent in January and 24.3 percent over 12 months. The index for lumber and plywood leaped 15.4 percent for the month and 21.1 percent year-over-year. Other inputs with double-digit increases for the past 12 months include roofing asphalt products, 19.8 percent; insulation, 19.2 percent; trucking, 18.3 percent; and construction machinery and equipment, 11.4 percent.

Association officials said construction firms are being squeezed by increases costs for materials and labor shortages. They urged federal officials to take additional steps to address supply chain disruptions and rising materials prices. These include continuing to remove costly tariffs on key construction components.

“Spiking materials prices are making it challenging for most firms to profit from any increases in demand for new construction projects,” said Stephen E. Sandherr, the association’s chief executive officer. “Left unabated, these price increases will undermine the economic case for many development projects and limit the positive impacts of the new infrastructure bill.”