Contractors' prices for new nonresidential buildings rose moderately in April

Contractors showed slightly greater ability to roll price increases into their bids in April, according to an analysis of producer price index figures released May 11 by the Associated General Contractors of America.

Indexes for new nonresidential buildings, which are a measure of what contractors estimate they would charge to put up a new building, increased 0.5 percent in April and 4.3 percent over 12 months for new school construction; 0.5 percent and 4.0 percent, respectively, for new warehouse construction; 0.6 percent and 3.2 percent for industrial buildings; and 0.1 percent and 3.2 percent for offices.

Association officials said that while improvement in the price indexes for finished buildings is a positive sign, it will do little to help construction firms working in the public sector, where the volume of projects has been declining. They added that because most firms have to guarantee their bids months before knowing what they will have to pay for materials, the industry remains particularly vulnerable to future price spikes.

The cost of construction materials took a breather in April, inching up 0.1 percent in April and 2.5 percent over12 months in the PPI for inputs to construction.

Read more...