FM Cost Trends: Construction Material Costs

Nov. 25, 2015

Construction Material Costs Are Mixed.

Commercial construction is showing gains in the 5-8% range, with hotels and offices leading the way. Overall, prices for construction materials seem to reflect a more stable domestic market less influenced by foreign markets. Among the major components, lumber and concrete are up while steel and pipe products (plastic and copper) are weak. Lumber’s increases are slowing down and headed toward a 3-4% increase for the year.

Prices for adhesives and sealants have traded in a narrow range. They are down for the current quarter. They seem to have a relationship to the price of oil, which is also down for this quarter. After dramatic gains last year, the price of wood siding has moderated, with gains in the 2-3% range. It seems to be mirroring the lumber industry as a whole, and following last year’s gain of 20%, wood siding is now in line with other lumber products.

After being up in 2013, fiber optic cable has been flat for the last 24 months. Since its peak in 2004, optic cable has decreased in price by almost 12% and no change is apparent on the horizon. This year, optic cable has shown a decrease of 1%. Granite seems to be languishing and shows no gains in spite of a recovering housing industry. Last year it began a substantial drive upward only to sputter in Q1 of this year. It recovered in Q2, but has remained flat since.

Vinyl floor covering remains flat despite major fluctuations in the price of petroleum over the last two years.

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