construction costs see a spike as 2019 ends, says survey

The cost of building a new structure last month increased across the board, according to a new survey released jointly by IHS Markit and the Procurement Executives Group.

This marks, according to the survey, the 38th month in a row in which the national construction industry has been hit with increased costs.

“Both the materials and equipment, and subcontractor labor indexes indicated continued price increases,” noted the survey, adding that respondents reported increased prices for ten out of twelve components within the materials and equipment sub-index.

Only in the carbon steel pipe and fabricated structural steel categories did prices see a decline.

The survey additionally notes that electrical equipment, transformers, and turbines were all costing contactors more at the end of 2019 than they were at the beginning.

“A majority of respondents reported higher prices for copper-based wire and cable for the first time since August,” the survey continues.

In a press release, John Mothersole, director at IHS Markit, noted: “Sentiment has improved in copper markets primarily on hopes that U.S.-China trade negotiations will yield further progress. Higher copper prices are also supported by underlying fundamentals, which remain tight due to sluggish production growth over the past year.”

An additional cost increase: ocean freight prices to the U.S. from both Europe and Asia.

Respondents also indicated that their companies remained challenged filling all truck driver, pipe fitting, and welder positions.

The IHS Markit/Procurement Executives Group survey is based on data gathered from procurement executives in major construction and engineering firms across the country.

By Garry Boulard

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