NEW YORK - The construction industry has already been grappling with higher material and labor costs. Now the three-month offer price for aluminum traded at the London Metal Exchange has surged 47% this year, Fox Business reported. Prices are up 73% from their levels before the pandemic.
"Aluminum is integral to residential construction and used to make everything from siding and gutters to insulation, nails, and HVAC equipment," National Association of Home Builders CEO Jerry Howard said.
Aluminum is also used in roofing, fencing, and many other products connected to construction.
Higher aluminum prices have "translated into higher material costs for builders as the price of building materials made with aluminum has increased 15-25% over that period," Howard said.
Homebuilders are also seeing the cost of lumber, iron, copper, steel, and natural gas skyrocket.
Lumber prices earlier this year had climbed by as much as 316% since the start of 2020, adding $36,000 to the cost of building an average-sized new home.
Builders and contractors are also dealing with higher transportation and labor costs. The construction industry has a shortage of roofers, glaziers, plumbers, electricians, and other types of workers crucial to development.
"All of this is pushing in the same direction, causing project prices to rise," Associated Builders and Contractors chief economist Anirban Basu said. "Some project owners are saying, 'no more for me, I'm done. I'm not going to go with this project right now.'"
Still, the Associated Builders and Contractors' Construction Confidence Index showed readings for sales, profit margins, and staffing levels all remained above 50, indicating expectations of growth over the next six months.
"The cure for high prices is high prices," Basu said.
The rising cost of aluminum is also impacting the automotive industry, railroad car construction, aerospace applications, and everyday packaging.
Most aluminum futures are traded on the London Metal Exchange, the New York Mercantile Exchange, and the Shanghai Futures Exchange.
Read more at FoxBusiness.com. With FOX 5 NY Staff.
Inside an aluminum factory. (FOX News File Image)