“Nobody saw it coming,” the Engineering News Record reported last month. “After more than a decade of relative price stability, contractors have been blind-sided by the largest price hikes for materials since the early 1970s.”

The price of steel products are up, anywhere between 20 and 60 percent, and increases in prices for lumber, plywood, gypsum wallboard, copper, stainless steel, pipe and fuel are “joining in to pummel contractors,” said the ENR.

Contractors across the nation are said to often be refusing to make project quotes good for any longer than 30 days, after which prices are adjusted every month, due to material price hikes.

“This type of uncertainty starts to drive overall pricing because you don’t know what you are getting into and you have to hedge your bets,” Karl Almstead, vice president at Turner Corp., told the ENR.

In Michigan, Great Lakes Fabricators and Erectors Association Executive Director Jim Walker said the structural steel price hikes are “a great concern of our members.” He said steel erection contractors are generally protected by contract clauses which set the price of steel for the time of delivery, rather than at the time the material is ordered. However, he said at least one fabricator that does business in Michigan, Havens Steel, has filed for Chapter 11 bankruptcy, in part because of steel costs.

With steel prices alone accounting for 5-10 percent of the average costs of commercial buildings, some fear the spike in prices could help slow the rebound for U.S. construction, and put a halt on some projects with very tight budgets.

ENR said it is tracking recent increases of 41% for plywood, 15% for lumber, 17% for ductile iron pipe and 16% for copper water tubing.

The villain in the price surge for steel is China, the ENR said, as that nation has increased its capacity to make steel by 38 million tons, or about one-third of U.S. capacity for one year. The demand from China has driven up the cost of scrap iron 88 percent over the last two years. Domestic demand is also up for steel, but other suppliers in Russia are restricting imports.

Prices are even higher on more expensive alloys used in the automotive industry – some well over 100 percent – which Walker said is a concern because it could affect owners’ ability to fund future construction projects. “You can see how steel prices affect us on different plateaus,” he said.