Industry groups say the president’s plan, which he’s set to expand Tuesday, would raise prices on construction materials, making it more expensive to build oil pipelines, bridges, highways, homes, and schools.
Contractors are already grappling with higher prices on key materials for construction projects like diesel fuel, steel, copper, wallboard, and lumber, said Ken Simonson, chief economist for the Association of General Contractors, a lobbying group with about 26,000 members which also includes suppliers. And now he expects those prices to go up.
“Trade restrictions such as ‘Buy American’ limit the ability of producers—whether it’s contractors or manufacturers—to get the best prices for the things they need, and ultimately the public is either going to pay more or receive less,” Simonson said. “It may mean some school projects or highway projects get deferred or cancelled, because the dollars that get allocated won’t stretch as far.”
Over the past 12 months, prices have increased 19% on steel mill products, 17% on copper and brass mill shapes, 7.6% on gypsum products like wallboard and plaster, and 7.3% on lumber and plywood, according to data released last week by the Bureau of Labor Statistics.
Contractors are already having difficulty passing on those higher prices to their customers, and as a result, their profit margins are being squeezed, Simonson said.