INDIANAPOLIS – The Indiana Department of Transportation says 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.

Over the past two years, costs for road construction projects have risen 36% on average in Indiana, Creighton said.

Citing data from the economic institute IHS Markit, the price of steel is up between 67% and 138%, depending on the type, Creighton said. For plastic pipes and fittings, it’s an 82% price increase, and diesel fuel costs are up 86% in Indiana, according to the data compiled by INDOT.

“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.”

That could change over the long term, especially when it comes to public transportation needs, Creighton said.

According to Richard Hedgecock of Indiana Constructors, Inc., multiyear projects have been most affected by the price hikes.

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

Wednesday’s Statehouse meeting comes just months before lawmakers are set to work on a new state budget – a process that happens every two years.

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

Pressel, who chairs the House roads and transportation committee, said it’s too early to tell what could happen with infrastructure funding in the next budget.

“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?”

Previous state investment as well as funding from the bipartisan federal infrastructure law have allowed INDOT to absorb the impact of inflation so far, Creighton said.