A tight labor market and supply-chain issues contributed to higher construction contractor bid prices in October, reports the Associated General Contractors of America (AGC).

As a result, AGC officials have urged federal officials to remove remaining tariffs on key construction materials including steel and aluminum, boost investments in construction-focused education and training and reconsider measures like Buy America that, it believes, artificially inflate the cost of materials for many projects.

“Tariffs and regulations are making construction more expensive, which if left unchecked will undermine private sector demand for projects and limit the impacts of new infrastructure investments,” says AGC CEO Stephen Sandherr.

Ken Simonson, the AGC’s chief economist, states that the producer price index for various sectors, such as nonresidential building construction, increased from September to October, leading to higher construction prices. Simonson adds that these increases fail to register contractors’ added costs from materials that are not delivered on schedule, rising wage rates and overtime pay, or the financial costs associated with delays.

“Although some materials costs have moderated, other costs are still climbing steeply, while contractors are incurring added expenses from delays caused by supply-chain disruptions, shortages of skilled labor and rising interest rates,” says Simonson. “Some owners may delay or cancel projects as the price to complete them continues to increase, threatening to undermine overall demand.”