Construction materials costs are outpacing overall consumer and producer prices by a wide margin. The government reported that the producer price index
Construction materials costs are outpacing overall consumer and producer prices by a wide margin. The government reported that the producer price index (PPI) plunged 1.4 percent in February but the PPI for construction materials and components rose 0.3 percent, noted Associated General Contractors of America Chief Economist Ken Simonson at the group’s annual convention in Palm Springs, Calif.
A cost analysis in AGC’s latest Construction Inflation Alert shows that with a generally strong market outlook, construction materials prices are likely to rise faster than the overall rate of consumer or producer prices again in 2006. The rate of increase for construction materials and components prices could be closer to the 10.1 percent rate of 2004 than the 6.1 percent rate of 2005, Simonson explains.