Add to this the high cost of diesel which is needed to power trucks and machines that are widely used in construction projects and materials, and you have a confluence of factors impacting the spend on a project. Rising gas prices affect energy-intensive heavy construction products such as bricks, cement, copper, and aluminum where energy accounts for about one-third of costs.
The cost of construction had already begun to rise in 2021. It is, in fact, the highest it’s been in 50 years with contractors and home builders feeling the effects. According to recent Census Bureau data, construction costs increased by 17.5% over the year from 2020 to 2021. This reflects the largest spike from one year to the next since 1970. Furthermore, the costs in 2021 were more than 23% higher than in pre-pandemic 2019.
Even if contractors are able to find used trucks to replace their old vehicles, they are paying a higher price for the vehicles along with the fuel needed to go to and from a job. These and other surges in prices should be factored into the cost of a job moving forward.
Sources: Chicago Times, Financial Times