01/25/2013

Facility Management Cost Trends: Construction Levels and Material Costs

Construction Levels and Material Costs on the Rise

 

U.S. construction activity continues to improve. Private construction, the larger component of the industry, is up with few exceptions. Led by apartments and condos, housing is one of the fastest growing sectors. The Fed will keep interest rates low for the next two years, a policy that helps single-family housing. Despite the rising construction activity, increases in material costs have generally been modest due to slow demand outside the U.S. In 2012, construction materials increased 1–1.5% in the U.S.; another 1–2% increase is expected in 2013.

After a seven-year slide, lumber may have finally ended its downward price trajectory. Its cost is rising faster than overall materials costs due to the housing recovery. Prices are up 6% from a year ago but still down 21% from September 2004. Last year at this time, the components of concrete products were up 2% while the price of the finished product was up 5%. Now, we have a reversal – the components are up 4.5% but finished concrete products are up only 3%. Steel is now 12% off its high of 2008. Non-domestic demand has subsided, forcing the closing of some mines. Steel prices will be flat for 2013.

Aluminum sheet spiked to record levels in Q2 of 2011 and then started a downward dive. The price of this volatile product is down 3% this year but up 15% since 2004. Copper has lost some of its recent gains after losing 40–50% of its value in 2008, gaining 80% in 2009, and hovering at record levels in Q4 of 2011. Copper’s price was flat in 2012 and likely to remain so in 2013, although uncertain demand makes a projection difficult.


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Note: All data is based on indices rather than unit or quantity prices.
Source: U.S. Department of Labor, Producer Price Index

 

 

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Need portable cooling?

Rent or buy spot coolers from full-service locations nationwide. On call “24/7”. Primary, supplemental or emergency cooling. Atlas Sales & Rentals, Inc., or call (800) 972-6600.

Click here for more info


Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

Yaskawa drives offer quality performance for air handlers and cooling towers on the roof to secondary chilled water pumps in the basement

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.


 
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