ARLINGTON, VA — Compounding the pressure facing U.S. construction firms, the Associated General Contractors of America (AGC) has noted that prices for materials rose in December, despite flat bid prices for the same period.

According to a statement by the AGC, “the price squeeze on contractors is likely to intensify in 2011 as global demand for construction materials grows and domestic demand for construction services remains weak.”

AGC noted that construction material prices rose 0.9 percent in December and 5.4 percent overall for 2010, despite a flat price index for finished buildings.

In a separate release by the AGC, construction employment dropped 16,000 during December as the industry’s unemployment rate hit 20.7 percent.

“At this point, it doesn’t look like there’s anything to replace the temporary help that the stimulus has been providing for the construction industry,” said Ken Simonson, the AGC’s chief economist in a statement. “Today’s figures offer yet another reminder that the construction industry remains, and is likely to remain, the hardest-hit industry in the economy.”

There were 5.6 million people employed in the construction industry in December, down , 27 percent from its peak of 7.7 million in August 2006. Simonson noted during the past 12 months the construction industry has lost 93,000 jobs.

Have something to say? Share your thoughts with us in the comments below.