The recent historic rate hike by the Federal Reserve is an alarming reminder that inflation still has the economy in a chokehold. American consumers and businesses are feeling the pain of rising prices in every sector of the economy, especially in construction. According to the U.S. Bureau of Labor Statistics, the cost of construction inputs rose 46% from the start of the pandemic to June 2022. While certain commodity prices like softwood lumber have moderated, others, like iron and steel, are up nearly 100% since February 2020.
The more costs rise, the less infrastructure taxpayers get per dollar. That’s a big problem for implementing the infrastructure bill enacted into law last November. And while Americans might assume the Biden administration would pull every policy lever available to help bring inflation and costs under control, the White House is instead poised to implement an inflationary executive order that will compound the problem by hiking construction costs by 12%-20% and needlessly exacerbating the industry’s skilled labor shortage.
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