The construction industry typically faces year-over-year increases in material costs, ultimately leading to decreased profits. Understanding how and why these costs are increasing is an essential starting point in order to effectively manage any budget.

Why Material Costs Are Increasing

Material prices can fluctuate seasonally due to a variety of factors ranging from natural disasters to heightened construction activity. One of the main reasons for the infamous annual price increase includes an increase in energy and crude oil costs. Another major reason is the trade situation involving tariffs on materials including steel and aluminum. This is creating major uncertainty in the marketplace with price increases happening monthly, with no way to predict what tomorrow’s price will be. Despite all this, construction companies must procure materials to complete projects. There is no way around this fact, so companies must find ways to mitigate the impact and protect their profits.

For the most part, increasing material costs are out of your control. Typically, the only solution that contractors have at their disposal is to find better ways to manage materials and waste. By tightening the belt on construction waste and inefficiencies, construction managers can better balance their budget for materials. Below you will find a few tips on how to handle these price increases and mitigate their impact on your projects.

Keep reading this blog on OnTraccr.com