Construction materials costs outpace consumer costs: AGC.The Associated General Contractors Associated General Contractors of America is the nation's oldest and largest trade association representing the construction industry. It was formed in 1918 following a request by President Woodrow Wilson. of America (AGC AGC Automatic Gain Control AGC Automotive Glass Cartridge (fuse) AGC Associated General Contractors AGC Associated General Contractors of America AGC Atypical Glandular Cells AGC Attorney-General's Chambers ) confirmed this week that construction materials costs are outpacing overall consumer and producer prices by a wide margin. "Today, the government reported that the producer price index (PPI (1) (Pixels Per Inch) The measurement of the resolution of a monitor or scanner. For example, a monitor that is 16 inches wide and displays 1600 pixels across its width would have a resolution of 100 ppi (1600 divided by 16). ) plunged 1.4% in February, but the PPI for construction materials and components rose 0.3%," said Ken Simonson, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the for AGC. Simonson issued an updated analysis of construction materials costs in the latest version of AGC's Construction Inflation Aler. The Alert shows that with a generally strong outlook for construction activity, materials prices are likely to rise faster than the overall rate of consumer or producer prices again in 2006. In the report Simonson says, "The rate of increase for construction materials and components prices could be closer to the 10.1% rate of 2004 than the 6.1% rate of 2005. Once again, however, prices are likely to vary greatly by type of material and project." "Oil and natural gas prices have fallen sharply from their post-hurricane highs," Simonson noted. "However, production from the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east is still down by more than 15%, keeping supplies tight. As of mid-March, the national average retail price of diesel fuel was around $2.55 per gallon, 60 cents below the record set after Rita but 35 cents (16%) higher than a year ago." "It appears diesel prices for 2006 as a whole will be up 10-30 percent over 2005, with wide month-to-month variation," said Simonson. Asphalt asphalt (ăs`fôlt, –fălt), brownish-black substance used commonly in road making, roofing, and waterproofing. Chemically, it is a natural mixture of hydrocarbons. prices also will be elevated and may go higher by year end, as refiners introduce more desulfurization equipment that leaves less liquid asphalt at the end of the refining process; construction plastics prices should come down from recent highs but average 10-20% higher than year-ago levels; and other products that rely on natural gas or that have high transport costs, such as paints, coatings, insulation, and brick, are likely to rise 5-10% in price. Simonson also predicted, "Rebuilding from Hurricanes Katrina, Rita and Wilma is not likely to have much impact on national markets for materials or labor, but will apparently be very protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. , and the overall level of construction in Louisiana will probably remain below pre-hurricane levels for several months at least." |
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