September data shows costs for most construction materials higher with copper, aluminum and steel seeing “significant” increases.
Construction costs, which had been relatively low for much
of the past year, are beginning to climb at an increasing rate, signaling the
end to the “limited-time” sale for construction, according to a new analysis of
the latest producer price index released by the U.S. Bureau of Labor
The analysis byKen
Simonson, chief economist for the Associated General Contractors
of America, found significant upward movements between August and September 2009
in the prices of copper (10 percent increase), aluminum (2 percent increase)
and steel (3 percent increase). All three products are essential
components for the vast majority of construction projects. Simonson
added that since the prices were collected a month ago, copper, aluminum and
diesel fuel have moved to multi-month highs.
“The days of
construction estimates coming in 20 percent under estimate may soon be coming
to an end,” Simonson reports. “These figures serve as an important reminder
that governments and developers looking for a good deal on construction should
act quickly before having to pay significantly more for their projects.”
Prices for other significant construction materials also
rose in September as compared to the previous month. The cost of
plastic construction products rose 1.2 percent, the cost of prestressed
concrete products by 1.5 percent, and iron and steel pipe and tube by 1.2
percent. Some construction materials prices did continue to decline,
such as gypsum (down 1.2 percent) and plywood (down 0.3 percent).
Simonson said the producer price data serves as a reminder
that “private owners and public agencies should accelerate any plans they have
for construction to take advantage of materials costs that remain generally
below year-ago levels but which are rapidly reversing their slide.”
herefor the latest producer price index figures.