While the Consumer Price Index is rising roughly 2.5 percent  a year,   construction companies are facing an inflation rate more than twice that high. It’s likely to remain there for the forseeable future, says Ken Simonson, chief economist at the Associated General Contractors of America. Simonson spoke Tuesday to the St. Louis Chapter of the National Association of Business Economists.

Prices for steel, copper, aluminum and cement have all jumped sharply this year, Simonson said. He predicts a 6 to 8 percent increase this year in the overall cost of construction materials, after increases of 10 percent in 2004, 6 percent in 2005 and 4.3 percent in 2006. Last year’s figure, he said, was helped by a decline in diesel fuel prices, “but, unfortunately, I think our good luck has run out.”

Simonson said he recently testified before a federal commission that’s trying to figure out how to maintain the nation’s aging transportation infrastructure. The rising materials prices make that a particularly tough challenge, he said.

In response to a question, Simonson said immigration reform is also a big concern for the construction industry. Any new law that restricts the flow of Latin American workers “would be devastating” to the construction industry, he said:

In state after state I’ve visited, the non-residential construction industry  has been telling me, ‘We’d be glad to hire more native-born workers if we could find them.’ There aren’t enough native-born workers willing to go  into construction anymore  who have the skills.