August and September 2012 saw an increase in construction material costs compared to August and September 2011. This costs increase follows several months of declines in material costs. While the cost decrease can help some general contractors offset the increase in material costs, many small business owners will find it difficult to absorb the rising material costs because they won’t be able to pass the expense on to their customers. in construction material costs. The increase in construction material costs in August and September were not foreseen by many general contractors. They were committed to their contracts that had been created months in advance and were unable to pass the costs on to customers. In the month of November, it will be difficult for general contractors to pass on these increased costs to their customers. The fluctuating economy makes it difficult for many general contractors to find new customers and new projects. Increasing rates in order to offset an increase in costs may cause contractors to lose some of their prospects for the year. This may mean that some general contractors that have been able to maintain their business may lose customers, profits, and ultimately their business. It will also make it difficult for many general contractors to compete against larger companies. Larger construction companies can offset some of these costs by buying in bulk. This is not an option for most general contractors who deal with small projects and do not have space to keep inventory. For general contractors that purchase material on a job by job basis, the increase in costs can be debilitating. Most contractors set up projects months in advance. This way they know what jobs they have and where they will be so they can schedule work crews and estimate costs and profits for the month. With a sudden increase in costs, the profits will be less and general contractors may have a difficult time paying their subcontractors. In order for general contractors in Utah to be able to help offset this increase in material costs, business owners may want to find ways to make their company more efficient. There are other ways to offset costs besides passing on the increased price to customers. Reducing overhead, streamlining processes, and making sure that equipment is running smoothly and is in good condition can help offset some costs and absorb the higher material costs. Buying energy-efficient products is another way to reduce costs for general contractors.