FM Cost Trends

Jan. 20, 2011
Materials Costs

The past year was a mixed one for materials costs. The effects of federal infrastructure initiatives on demand were limited, but signs in early 2011 suggest that these will have a greater impact this year. In general, construction materials have begun to increase, albeit with some exceptions, including lumber, whose slide has nonetheless moderated.

After large increases from 2004 through 2008, prices for cement and concrete have flattened out. Although not close to its runaway peak in 2008, steel is registering considerable increases in the 5% to 7% range since last year. The international consolidation of ore producers and the increased demand from Asia are fueling the fire. With declines of up to 30% in the first 6 months of 2009, followed by increases of 25%, aluminum is on a roller coaster ride of volatility. Overall, prices are up 3% this year and up 15% since 2004. After losing 40% to 50% of its value in 2008 and gaining 80% in 2009, copper increases have slowed down but still lead the pack with gains of roughly 10% year to date.

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