The escalating prices of commodities like steel, iron, drywall, plywood and concrete is hitting contractors' bottom lines pretty hard these days. Add to that higher gasoline prices, and one discovers that the construction industry is getting much more expensive to be in. The culprit seems to be a building boom in China, which is decimating inventories and driving prices higher. Much of the higher cost is being absorbed by contractors, since many businesses sign contracts--and agree to pricing--well before an order or project is completed, leaving them to foot the bill for anything above and beyond what was agreed upon.
In Tampa, as Benita Newton notes in "Costs go through the roof," some business are stockpiling critical materials when they see prices begin to rise and are trying to pass along the increased costs to customers. Even the Florida DOT recently implemented a steel price index for its contracts to account for increases in project costs. Yet most business are taking a bite out of profits to meet demand in this competitive industry.