Construction Costs Steadying – Uptick Expected

We’ve seen construction prices fall as construction activity has slowed over the past year or so. Reed Construction Data is now reporting that the price is leveling. We anticipate prices to remain steady and to rise as well, driven by a pickup in activity off the lows, and because of the weak dollar.

Construction materials prices fell 7.5% from September 2008 to August 2009. The decline is now over with the price index approximately steady for the last three months. Little change is expected in the next six months although a slight upward trend is likely. Both the overall economy and the construction market are operating well below potential. The unused manufacturing resources will exert a significant downward pressure on materials prices. Also, material inventory is still very high although it has declined substantially since earlier in 2009.

[via Reed Construction Data]

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Comments

Zach: Lifting Equipment Rentals October 27, 2009

Unfortunately, we saw this price increase dramatically impact the activity of many of the firms that use our equipment. While we’re hopeful that this trend will reverse itself, the industry in the Northeast appears to be almost dormant.

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