Pricing Insanity: Material Costs Escalate, Driving Contractor Desperation

By: Robyn Griggs Lawrence

In Construction Dive‘s article on the material costs escalation disrupting the construction industry, John Greenhall explains how owners are open to discussing the possibility of including money for escalation in contracts. He said, “They want to keep a tight rein on it, and contractors and subcontractors have to be willing to share information. If contractors are willing to show what prices are in their bids so escalation can be tracked, owners are willing to talk to them. I see that on projects both big and small.”

At conventions, on Zoom calls and in casual conversation, it’s the only thing contractors talk about anymore. Everyone wants to know how everyone else is dealing with the rapid escalation of material prices, a crisis that revved up last spring and shows no signs of slowing down for at least another year.

“Starting in March of this year, it just became all-consuming,” said Brian Perlburg, senior counsel of construction law and contracts for Associated General Contractors of America. “It hasn’t let up. It’s become an evergreen issue.”

“Contractors have the most difficult job in America today because every decision is fraught with risk and uncertainty,” said Anirban Basu, chief economist for Associated Builders and Contractors, as he predicted material costs would continue to soar well into next year.