The Producer Price Index (PPI) for materials and services used in nonresidential construction rose 0.1 percent from January and 3.1 percent compared to February 2025, driven by sharp increases in metal prices. An analysis by the Associated General Contractors of America (AGC) warned that rising costs are making it increasingly difficult for contractors and owners to proceed with planned projects.
Injections of federal funding, coupled with pent-up demand from the pandemic shutdowns, created a robust construction market in 2022 and 2023. In 2024, signs of market softening began and continues into 2025. The Associated Builders and Contractors (ABC) reports that its backlog indicator, which reflects the work commercial and industrial contractors have coming in the months ahead, shows a drop in monthly backlog from 8.9 months in 2023 to 8.3 months in 2024 and has fluctuated around that number throughout the first half of 2025.
AGC joined a U.S. Chamber of Commerce-led amicus brief asking the U.S. Supreme Court to review an appeals court decision that creates roadblocks for trade associations and businesses challenging illegal federal agency actions.
Construction contractors have a decidedly mixed outlook for 2024 as firms predict transitions in demand for projects, the types of challenges they will face and the technologies, including artificial intelligence, they will embrace according to survey results the Associated General Contractors of America and Sage released today. Amid these changes, contractors are struggling to cope with significant labor shortages, the impacts of higher interest rates and input costs, and a supply chain that, while better, is still far from normal, according to A Construction Market in Transition: The 2024 Construction Hiring and Business Outlook.
The Associated General Contractors of America filed suit today in federal court to block the Biden Administration’s unlawful effort to expand the reach of a decades-old law that governs wage rates on federally funded construction projects. Association officials noted that the administration lacks the legal authority to expand the law to cover manufacturing facilities miles away from projects, or to retroactively impose the measure on already-executed contracts, among other concerns.
AGC CEO Stephen Sandherr and members of AGC’s Government Affairs staff met with the Federal Highway Administration’s (FHWA) Administrator, Shailen Bhatt, on January 24 to discuss top industry priorities including, among other things, ongoing implementation of the Bipartisan Infrastructure Law (BIL), the Disadvantaged Business Enterprise (DBE) program, ongoing supply chain constraints, and work zone safety.
Prices for Some Key Components Have Already Begun Rising in January While New Buy America Requirements Will Inflate the Cost of Many Materials, Construction Association Officials Caution
Total construction spending decreased by 0.4 percent in July as spending on new houses and apartments tumbled, overshadowing a pickup in private nonresidential and public construction, according to an analysis the Associated General Contractors of America released today of federal spending data.
No surprise to anyone buying anything but the Associated General Contractors summed up some of the price increases facing the industry in a recent report.
The Associated General Contractors of America recently stated its concerns with expanded Buy America regulations. In a statement, AGC of America stated it supports sensible efforts to effectively incentivize the growth of America’s domestic manufacturing capacity. Instead, the Biden administration is doubling down on failed procurement policies with its new Buy America mandate. This is the kind of red tape initiative that undermines American’s confidence in the federal governments’ ability to effectively use their tax dollars.