The hard-hit construction industry is facing another difficulty as material costs begin to rise. The Associated General Contractors of America has brought attention to the fact that prices for materials have increased up to 6 percent during 2009.

This could drive more firms out of business as they are forced to either raise prices to pass on the costs to the consumer or to absorb the costs to remain competitive.

AGC also says that now is the time for public building. An AGC report urges governments to accelerate construction time lines to take advantage of lower building costs right now. The lower price tag comes from low interest rates and construction companies hungry for work.

An AGC survey of nearly 700 contractors, released on Jan. 20, found that 81 percent of contractors had cut profit margins for their 2009 bids, and 11 percent were willing to take a loss. While good news for governments, this cannot be sustained by contractors for long.

For more information about the AGC report, click here.