Road construction costs up 36% since 2020

Indianapolis, Indiana – According to the Indiana Department of Transportation, road construction costs have risen significantly over the past two years, largely due to inflation.

“Inflation is one of the biggest challenges to the agency and others in the industry right now,” Chris Creighton, INDOT’s chief of staff, told state lawmakers during a summer study committee meeting Wednesday.

According to Creighton, the average cost of road construction projects in Indiana increased by 36% during the previous two years.

Depending on the type of steel, the price has increased by 67% to 138%, according to statistics from the economic firm IHS Markit, Creighton said. The data gathered by INDOT shows that the cost of diesel fuel has increased 86% in Indiana while the cost of plastic pipes and fittings has increased by 82%.

“We’re planning five, six, seven years out all the time,” Creighton said. “So obviously this is a very big fluctuation in the market, but it has not had us pulling back anything that we’re doing now.”

Long-term, especially in terms of demands for public transit, this might change, according to Creighton.

The price increases have most significantly impacted multiyear projects, according to Richard Hedgecock of Indiana Constructors, Inc.

“Now they’re on contracts and we’re seeing these 34% increases on costs,” Hedgecock said.

The Statehouse gathering on Wednesday takes place just a few months before legislators begin developing the state’s annual budget, which is done every two years.

“This isn’t an Indiana issue,” said State Rep. Jim Pressel (R-Rolling Prairie). “This is a nationwide issue.”

It’s too soon to predict what might happen with infrastructure investment in the upcoming budget, according to Pressel, the chair of the House committee on roads and transportation.

“It’ll be part of a bigger conversation,” Pressel said. “Is it more funding, is it less work, is it using innovative materials – is that an opportunity?”

INDOT has been able to withstand the effects of inflation thus far thanks to prior state investments as well as funds from the bipartisan federal infrastructure package, according to Creighton.