AGC Construction Inflation Alert
For nearly three years the U.S. construction industry has been buffeted by unprecedented volatility in materials costs, supply-chain bottlenecks, and a tight labor market. To help project owners, government officials, and the public understand how these conditions are affecting contractors and their workers, the Associated General Contractors of America (AGC) has posted frequent updates of the Construction Inflation Alert.
New challenges keep emerging, even as some conditions improve. Overall inflation rates and economic growth have cooled, while congestion at West Coast ports has eased. These changes have led some owners to assume that construction costs and completion times must also have improved. Unfortunately, this is not the case for a large number of projects, materials, and contractors.
Demand for infrastructure, manufacturing, and power construction appears to be strong and likely to strengthen further, perhaps for several years to come. In any case, the cost of construction materials and labor does not generally move in sync with the overall economy. In short, owners should not assume that delaying projects will enable them to avoid volatility and disruptions in construction costs, delivery times, and labor supply, even if the economy slows significantly.