Construction costs cooled in November, says AGC
“The next 12 months are still likely to show higher costs for construction than for the economy as a whole,” said Ken Simonson, chief economist for the Associated General Contractors of America.
Simonson was commenting on the producer price index report released Dec. 19 from the Bureau of Labor Statistics.
“The index for construction materials and components dropped half a percent in November, even as the overall PPI for finished goods climbed 0.8 percent,” Simonson said. “But over the last 12 months, construction costs have jumped five percent, versus 2 percent for the consumer price index and a skimpy 0.9 percent for the finished-goods PPI.”
The AGC also reported that prices declined in November for diesel fuel and asphalt, plastic construction products, lumber and plywood, gypsum, steel and copper products. But there were continuing increases in the prices of most concrete products, brick and aluminum mill shapes.
“As long as demand in industrializing countries remains strong, construction is likely to face higher costs for materials that depend on world markets,” Simonson said. “And with diesel prices stuck near $2.60 per gallon, the cost of delivering materials to job sites and running the equipment to install them will keep costs high.”
A broadcast discussing construction materials costs is posted onwww.agc.org/podcast.