Recent news related to construction material escalation has been sobering. Today, contractors face increased risks related to cost escalation of numerous construction materials, and it is expected that increased costs will be passed on to owners in the form of increased bid prices. While U.S. Bureau of Labor Statistics data indicates that bid increases lagged for much of 2021, data from October 2021 to present, shown in the graph below, indicates that this is exactly what is beginning to happen. After lagging for a full year, bid price PPI has increased 17% since February 2021.
Figure 1: Construction Input vs Bid Price
While inflation has been a widespread phenomenon, construction material input prices have been uniquely affected,