The 2008 3Q Cost Report: Steel Price Spike Meets Credit Crunch

Construction inflation is no longer firing on all cylinders, thanks to an ever-deepening recession in residential construction markets and a cooling off in global commodity markets. Materials prices with a high-end use in housing are in a free fall, with the most dramatic decline this year coming for gypsum wallboard. With housing making up over 25% of total cement shipments, producers are finding it more difficult to push through the double-digit price hikes of the past few years. Economists predict rollbacks in cement prices soon. While there are still plenty of price gyrations for metal products, they don't have the amplitude or duration of previous spikes. Rebar prices this quarter retreated from large gains during the first half. Labor markets in the robust nonresidential and civil sectors remain tight, putting upward pressure on wage settlements. Estimators say idle workers in the housing market cannot easily cross over to those sectors, where work is available. Industry sectors covered in the report include:

Articles:

• Economics: Credit crisis' cloud over construction
  
• Steel: Prices slip after last spring's spike
  
• Insurance: Financial crisis rocks big insurers
  
• Powerplants: Owners face sticker shock
  
• Labor: Tight markets push wages higher
  

Data Tables:

• Construction Materials Price Movement in 2008
  
• Builders' Construction Cost Indexes
  
• Compensation Insurance Base Rate
  
• Open Shop Wage Rate for Journeymen
  
• Hourly Union Pay Scales, September 2008