As the U.S. economy has wrestled with the impacts of inflation over the last few years, construction has been one of the industries most impacted by rising costs. Construction materials were strongly impacted by supply chain breakdowns during the pandemic, which created shortages for key goods during a period of high demand. Hopes that price increases would level out as supply chain issues were resolved eventually gave way to the reality of broad-based inflation.
Rising costs for inputs like materials, equipment, labor and transportation have increased the price tag for many construction projects. And with tremendous needs for new housing stock in the United States and a slew of infrastructure projects on the horizon from federal legislation like the Bipartisan Infrastructure Law and the Inflation Reduction Act, rising costs will impact how quickly and how affordably the country can meet its construction needs in the years ahead.
Construction aggregates include sand, gravel, crushed stone and other materials – all of which are used for applications like drainage, foundations and as an ingredient in composite materials such as asphalt and concrete.
These important uses give aggregates a critical role in the construction industry, impacting the cost of other building supplies, as well as the larger economy: a total of $35 billion of crushed stone and sand and gravel was produced in the United States last year.
While increasing costs of equipment and labor influence construction aggregate prices, local availability and transportation are critical drivers. Due to their weight and the large volumes required for projects, aggregates are most cost-effective when sourced close to their point of use through a local aggregate supplier.
All 50 states produce sand and gravel, and all but two produce crushed stone. However, variations in permitting regulations and community appetite for new quarry projects can complicate sourcing aggregates in certain areas.
These shortages can increase costs through greater competition for supply or higher shipping expenses. As a result, the vast majority of states have seen large increases in the price of construction aggregates in recent years, and these price increases in construction aggregates are directly impacting building costs.
Researchers calculated the percentage change in the average price of 1) crushed stone and 2) sand and gravel (weighted by production quantity) between 2022 and 2019, the latest three-year period available.
- New Jersey has fared the worst of any state, with aggregate price increases of 41.1% during the study period – nearly 10 percentage points higher than the next-fastest increasing state of Utah (32.6%).
- Notably, aggregate prices among top production states such as Texas, California and Ohio have grown less than 10% since 2019, below the national average of 15.8%.
- Just four states – Idaho, Delaware, Louisiana and North Dakota – have experienced declines since 2019.
The analysis was conducted by Twisted Nail, a construction aggregate supply company based in Texas. For a complete breakdown of production and price figures of both crushed stone and sand and gravel for all 50 states, check out the full report.