You would think that the slow down around the Country in the building industry would suggest that building material costs should be coming down. Well you would be wrong with that assumption. Today I read an interesting article, Builder’s ‘Dumbfounded’ By Continuing Cost Increases, that reveals a significant increase in building material costs this year.
The two driving factors for increased costs are soaring fuel prices and overseas demand for materials from China and India. Shipping and manufacturing costs due to increased fuel prices have driven up most building materials. The steel industry has hampered by the weak dollar making U.S. steel especially attractive to overseas vendors.
The heavy civil construction sector, highways, roads, and bridges saw an average increase of 19 percent this year in large part because of steel and diesel fuel. The single family housing sector saw an average increase in costs of almost 6 percent. The one positive note was the decrease in some lumber and gypsum (drywall) products.
Obviously the increased costs have taken a toll on the construction industry. Forecasters don’t see much change over the next couple of years due to soaring inflation numbers. It will certainly be interesting to see how things pan out over the coming months and years. I for one certainly hope things settle down and we can get back to building more new homes.