Construction Costs Up in March
New construction cost index data show growth in March to a 60.4 reading, up from 55.3 in February. A 60-point reading for labor and materials indicates widespread price increases.
The price for materials and equipment was up to 60.7 in March, a 5.8-point monthly increase. Out of 12 subcomponents for types of equipment and materials, 10 posted price growth. IHS Markit survey respondents report price drops for fabricated structural steel and carbon steel pipe. Meanwhile, labor costs grew in all U.S. regions. The the subcomponent for current subcontractor labor costs had a 59.7 reading in March, growing from 56.3 in February 2019.
The six-month headline expectations for construction costs index reflected increasing prices for the 31st consecutive month. The materials/equipment index came in at 66.1 in March after reaching 70.6 in February. Price increase expectations were also widespread with expectations for sub-contractor labor rising to 68.1 in March, up from 60.3 in February and labor costs expected to rise in all regions of the U.S. and Canada. In the survey comments, respondents indicated a tight labor market for all skilled trade workers.