Material Costs Increases Hit the Industry

In March, the Associated General Contractors of America issued an inflation alert, responding to the construction industry’s “unprecedented mix of steeply rising materials prices, snarled supply chains, and staffing difficulties, combined with slumping demand that is keeping many contractors from passing on their added costs.” 

According to the alert, input costs for general contractors were up 12.8 percent from April 2020 to February 2021, reflecting cost increases for diesel fuel (up 114 percent from April 2020 to February 2021), lumber and plywood (up 62 percent), copper and brass mill shapes (up 37 percent), and more.

Those cost increases are also hitting glass products. The U.S. Producer Price Index for flat glass is up 5 percent year-over-year, from 114.0 in March 2020 to 119.6 in March 2021.

In the previous week alone, Glass Magazine has been notified of cost increases of 10 percent or more from several glass suppliers. In a letter to customers, one float manufacturing cited rising costs for raw materials, logistics and labor challenges as the drivers behind the increases. 

Glass Magazine also received reports of cost increases for fabricated glass and glass components. One global interlayer supplier announced increases beginning May 1. 

AGC officials offer some guidance to construction firms on how to cope with rising material costs.

“Provide project owners with timely and credible third-party information about changes in relevant material costs and supply-chain snarls that may impact the cost and completion time for a project that is underway or for which a bid has already been submitted,” according to AGC officials. “Owners can authorize appropriate adjustments to design, completion date, and payments to accommodate or work around these impediments. Nobody welcomes a higher bill, but the alternative of having a contractor stuck with impossible costs or timing is likely to be worse for many owners.”