Construction costs, which have been relatively low for a year, are beginning to climb at an increasing rate, signaling the end to the “limited time” sale for construction, according to a new analysis released by the U.S. Bureau of Labor Statistics.
The analysis by Ken Simonson, chief economist for the Associated General Contractors of America, found significant increases between August and September 2009 in the prices of copper (10 percent), aluminum (2 percent), and steel (3 percent). All three products are essential components for the vast majority of construction projects.
Since the prices were collected a month ago, copper, aluminum and diesel fuel have moved to multi-month highs, Simonson added.
Prices for other major construction materials also rose in September, compared to the prior month, the report noted. The cost of plastic construction products rose 1.2 percent; prestressed concrete products, 1.5 percent; and iron and steel pipe and tube, 1.2 percent.
Some construction materials prices did continue to decline. Gypsum dipped by 1.2 percent and plywood by 0.3 percent.
Nevertheless, Simonson warned: “The days of construction estimates coming in 20 percent under estimate may soon be coming to an end. 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.”