Contractors Facing Squeeze as Margins Shrink

New York, NY, March 29, 2011 -- Rising materials prices along with aggressive bidding have raised concerns that more contractor defaults may coming, Engineering News-Record is reporting.

ENR.com said that many firms that bid aggressively in recent months and cut profit margins face considerable hardships as prices for materials continue to rise.

“The trends we’re seeing show that the vise is tightening on contractors,” says Ken Simonson, chief economist for the Associated General Contractors.

While construction prices rose 6.1% between February 2010 and February 2011, prices for finished buildings remained nearly flat, ENR said.