The big price spike

Much of what was discussed at StoneSummit 2005 with regard to oil and gas prices, and material costs, was reiterated by Ken Simonson, Chief Economist for the Associated General Contractors of America. He believes construction materials prices will rise at least 10 percent next year, instead of the six-to-eight percent rise he had expected before Hurricanes Katrina and Rita. “Contractors can expect increased diesel fuel costs to operate off-road equipment such as bulldozers, tower cranes and trucks, Simonson says. "Fuel cost increases will also show up as freight surcharges on the thousands of deliveries to a typical construction job site. Most of the increased costs in construction materials throughout the country will result from a reduction in oil and natural gas production, and not from higher demand for those materials for the reconstruction projects in the devastated areas. Lost production and imports due to the storm will result in higher prices and/or supply disruptions for PVC pipe, other construction plastics, tires for large off–road equipment, galvanized steel, gypsum products and cement, among other products." It ain't gonna be pretty, folks. Your comment?