Tag Archives: low building material prices

Construction Costs: It is Not Getting Any Cheaper

We’ve seen prices of materials creeping up fairly steadily for the past year, and according to the Associated General Contractors of America (AGC), the era of cheap construction materials may be slipping away.

The price index for construction costs input — a weighted average of all materials used in construction, plus items consumed by contractors, such as diesel fuel and tires on equipment — rose 0.4 percent from December to January and 4.5 percent during the last year, according to Ken Simonson, chief economist for AGC.

The 4.5 percent increase was relatively small, Simonson said, but the cost of construction materials could accelerate in the months to come.

“Unfortunately, this slowdown has already ended for some key materials,” Simonson said in a statement. “Crude oil and diesel prices have moved up significantly since the January price index data were collected.”

Throughout the country, any business which supplies, or manufacturers building products is feeling the grip from the negative market conditions which is inflating the construction costs of everything from roofing shingles to building supplies.

These conditions include oil prices over $100 per barrel, a weak U.S. dollar American companies must use to purchase commodities which, in many cases, are traded worldwide; a stagnant building construction industry; and, severe weather around our country that has left over one million American homes with storm damage, causing the diversion of more building and roofing materials to the repair and remodeling of homes.

A recent report, which measures inflation, had a jump of 6.1 percent year-to-year for asphalt roofing and 10.2 percent for steel. Those numbers might be just the beginning of a wave of construction cost increases which contractors are already expecting.

Price increases though, haven’t affected every commodity….yet. Prices for lumber have remained fairly steady. The widening price spread between steel and lumber products is leading more General contractors to build using lumber framework.

Builders and suppliers are not in the greatest of bargaining positions right now, and passing along price increases to buyers isn’t tenable. With oil prices sky rocketing, oil is going to be diverted to the manufacturing of whatever product yields the highest profits, and building materials generally don’t fall into this category.

What does all this mean?  If you are contemplating new construction, whether it’s a garage, shop, new business or home and have the financial resources or backing, the price is not going down.  Not any time in the near future, and possibly not ever again.  As the saying goes, “there is no time like…the present

Building Design Solutions

Next thing you know….

One of our Building Designers, Bob, and I were sharing stories about our client’s favorite objections. You know, why they are procrastinating moving forward with their new building projects.

Keep in mind, our clients usually contact us because they have a problem. Something like, “My wife/husband wants to be able to use the garage/basement/family room and needs my stuff out of there!” Another favorite is, “I’ve been paying to store my stuff or board my horse and am tired of having to drive there and/or make someone else’s building payments”.

Or, you are heading towards your goals – a home business, expanding your existing business, or you just need more space.

Now Bob and I had shared several stories we had heard in the past, but he came up with what may be the all time winner…..

Here is Bob’s favorite. This is from a client who is certainly a part of rural Americana at its best. The gentleman told Bob:

“I will put down posts and then lay a 6×6 horizontally on top of cut off posts 2 feet off the ground and place a lesser building on top because I have trees nearby with aggressive roots.  I’ve seen what these roots have done to my brick wall and I don’t want the same thing going on with my building.” 

Certainly a building design solution we are not familiar with and we hope it works well for him.  It better be somewhere with little or no wind.

Building materials are at historic lows, in relationship to inflation. There is has never been a better time to invest in a new pole building.

What is YOUR reason for not having your problems solved, or reaching for your goals?