FM Cost Trends

11/01/2010 |

Reidential Recovery Begins to Impact Construction Materials

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Although commercial construction remains very weak, glimmers of recovery in the housing industry – despite the expiration last spring of the federal government’s first-time buyer program – are driving higher prices. Construction materials, which were flat last year, are now up 2 to 3%, with increases in both labor and materials, despite a fall from a summertime peak.

Adhesives and sealants leveled off last year after steady increases of 5 to 6% per year since 2005. Rising oil prices affect this component. With lumber on the rise again, wood siding has posted 5% gains since last year. After being down last year and reaching new lows in January, optic cable has seen a mild rebound of 3%. Over the last 5 years, optic cable has decreased in price by almost 10%. In the past granite prices seemed to be independent of demands or downturns, but weak prices show that this material is susceptible to a down market. After increasing at a steady 4% annual rate since 2005, vinyl floor covering was flat this year until the third quarter, during which prices increased 5%.

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