If you are a general contractor with projects underway, you probably don’t need to be told that prices for construction materials have gone up and available supplies in many cases have decreased. Prices of construction materials jumped more than 20% from January 2021 to January 2022, according to an analysis by the AGC (Associated General Contractors of America of government data.
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. 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% from December to January and 20.3% 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% for the month and 16.5% from a year earlier.
A few of the many categories of materials show the extent of the price fluctuation. The price index for steel mill products soared 112.7% over 12 months despite declining 1.6% in January. The index for plastic construction products climbed 1.8% for the month and 35% during 12 months. The index for diesel fuel jumped 5.1% in January and 56.5% for the year. The index for aluminum mill shapes jumped 5.6% in January and 32.7% during the past 12 months, while the index for copper and brass mill shapes rose 4.1% in January and 24.8% during the year.
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.
In other news, if contractors are having trouble finding material, suppliers are equally at a disadvantage finding projects that need their products. An answer for both is now available. PlanHub, a developer of pre-construction SaaS (software as a service) for contractors, launched PlanHub for Suppliers, a new software platform that enables construction materials suppliers, distributors, and manufacturer representatives, to locate sales opportunities and connect with purchasing contractors early in the construction project process. The new supplier-focused software helps them quickly find and be notified of construction projects that require the products they sell.
With the current construction boom, global supply chain issues, and nationwide logistics challenges, suppliers need a way to connect with builders looking to purchase their construction materials – directly and as early in the process as possible. PlanHub’s new Supplier release gives these sellers access to thousands of projects in the pre-construction planning phase that already have the materials needs specified and gives them a direct channel to share their offers and estimates. Suppliers can start for free in PlanHub and immediately have access to hundreds of thousands of contractors and their projects.
Powered by the PlanHub bid technology and contractor database, the new supplier platform gives sellers a unique new sales channel to reach qualified prospects, just as they are planning purchases. Suppliers in PlanHub have the advantage of seeing more sales opportunities earlier in the process, thus allowing them to proactively provide estimates to buyers. This helps the contractors that are planning projects, as they get realtime quotes based on the project specifications that they are using to develop their bids. Suppliers communicate directly with active contractors and can use PlanHub to grow and manage their sales network, in a single, organized, cloud-based location.
Materials suppliers can now also receive in-bound sales requests in PlanHub. These are direct notifications that come from contractors in PlanHub that are looking for a new sales estimate to be developed for products they will need to purchase. Sharing and seeing all this information earlier in the sales process helps suppliers to forecast better and manage potential supply chain issues that may arise. Earlier understanding of project needs makes the inevitable longer lead times less of an issue – and gives the seller a clear advantage.
Suppliers, distributors, and manufacturer reps can sign up for PlanHub for free. After providing information about the products that they sell and the areas they cover, they then have the immediate ability to begin searching for projects and contractors in PlanHub.
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