Cost of construction materials drops
Costs for a number of construction materials declined 0.3 percent in May, according to an analysis of producer price indexes from the Associated General Contractors of America.
“The slowdown in construction input price increases is a rare and possibly short-lived event,” said Ken Simonson, the association’s chief economist.
He added that the last time prices rose so slowly from a year earlier was February 2010.
“Meanwhile, some of the price increases we are seeing for materials like gypsum and lumber reflect a strengthening new residential and commercial remodeling construction,” Simonson said.
Materials prices are up 2.3 percent from year-ago levels, and contractors are typically charging 3.1 percent to 4.3 percent more to build, a historically small increase.
With continued economic troubles in Europe and slowing demand in China, prices should remain fairly stable, Simonson said.
AGC Chief Executive Officer Stephen E. Sandherr said that makes it a good time to start private or public construction projects.
“The price break makes this an ideal time for both private sector owners and government agencies to start construction,” Sandherr said. “Taxpayers will get a good deal if Congress can complete work soon on long-stalled highway and transit funding, and avoid making further cuts to building and infrastructure construction projects while prices are still relatively low."
The full index of construction prices is available from the AGChere .