Materials costs go up again

Imported inflation for oil, steel and cement pushed contractors’ materials costs up 1.3 percent in January over December after nine months of small, offsetting, monthly price changes, according to Reed Construction Data. These inflation pressures were strong enough to overcome the continuing slide in materials demand in a weakening construction market.

Materials costs increased 4.1 percent from December 2006 to December 2007. Prices are forecast to increase less in the current year, probably about 2.5-3.0 percent, as the depressing impact of a strengthening U.S. dollar, still declining real construction spending and slower economic growth outside the U.S. takes hold later in the year. Construction materials price inflation will pick up slightly to 3-4 percent in 2009.

January’s significant price changes included a 1.9 percent rise in structural steel prices, a 3.2 percent jump in diesel-fuel prices, a 1.2 percent increase in the cost of aggregates and 0.5-1.0% increases for concrete products. Your comment?