How Much Have Construction Costs Risen in 2022?

Construct Connect’s Chief Economist Alex Carrick recently did his quarterly Producer Price Index Series on the state of the U.S. construction industry’s material cost changes. The long short: his headline gives it away – “Spikes Everywhere.”

Alex’s index tracks 15 materials. Of those 15, only one—prefabricated metal buildings—saw a 1.1% decrease. Thirteen of the 15 saw a double-digit percentage change increase in 2022 over the past year. The energy-related cost increases (+63.8% for diesel fuel, +61.5% for gasoline, and +36.9% for asphalt), the Russian-Ukraine war, and the supply chain disruptions all had a knock-on effect on building material costs.

Since many of our customers deal in concrete, we’ll home in on Alex’s Cement & Brick analysis. In looking at year-over-year differences, Alex’s calculations identified the following trends:

• Sand, Gravel & Crushed Stone was up +8.0% year-over-year
• Ready-Mix Concrete was up +7.1% year-over-year
• Cement was up +8.25% year-over-year
• Clay Brick was up +9.3% year-over-year
• Also pertinent to our customers (but found on Alex’s Accessories & Arterial chart), Paints & Coatings were up +20.6% year-over-year
• Asphalt was up 36.9% year-over-year
• Diesel fuel, which impacts all costs, up 63.8% and unleaded gasoline up 61.5% year-over-year

W. R. MEADOWS has been in business since 1926, so you might say this isn’t our first rodeo with tough economies. We survived the 1929 stock market crash, The Great Depression from 1929 to 1939, and the 12 recessions since 1939. We’ve grown conservatively, and we’ve spent conservatively.

With every price jump we’ve experienced since 2021, we’ve done our best to absorb as many of these increases as we possibly could before ever passing them on to you, our valued customers. We do this because your businesses matter. Your success is our success. When W. R. MEADOWS delayed increasing our prices, it potentially made the difference between some of our customers shuttering their businesses vs. buying them some much-needed time until they received delayed payments or saw a new contract become signed. We won’t deny we’ll all be facing tough days ahead in the next year or so. But this is no ‘malaise speech.’

At W. R. MEADOWS, our glass will always remain half full.

To read Alex Carrick’s full Construct Connect report, click here. To connect with or follow Alex Carrick on LinkedIn, click here. For help with any of W. R. MEADOWS products, please call our experts at (800) 342-5976.

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