Recent promises of tariffs and impending trade wars over metals, softwood lumber, and other imports have had many wondering about the effects on construction material pricing. Associated Builders and Contractors, Inc (ABC) recently analyzed data from the Bureau of Labor Statistics and it already shows a large increase in cost.
According to ABC’s research, construction materials have risen in cost 8.8% year-over-year and 2.2% from April to May 2018, which is the largest monthly increase since 2008. Nonresidential materials prices rose at a slightly larger percentage, 8.9% and 2.3% respectively.
It should have been obvious that introducing new tariffs would greatly increase materials costs in the short term. The major question is whether or not the U.S. can ramp up production of those materials, like steel, aluminum, and softwood lumber, quickly and cheaply enough to bring the prices back down.
Specifically, iron and steel products have increased 2.5% in 2018 versus 2017 and 2.5% from April to May. Softwood lumber also increased a significant amount, totaling a 6.4% increase month-to-month and 15.4% over the past year.
Plumbing fixtures and fittings have seen the smallest increases, totaling a 2.6% increase for the year and showing a 0.1% drop in costs month-to-month. Concrete products also showed a modest increase, at 0.3% for the month and 5.1% for the year.
ABC’s Chief Economist Anirban Basu is not viewing the news in a positive light. As he mentions in the ABC article, these increased costs could affect the construction industry in a variety of different ways, such as tightening margins and lowering the demand for construction projects.
The last time we checked in on the sinking, tilting Millennium Tower in San Francisco, engineers believed they had developed a stop to the buildings settling, but that came with a hefty estimated price tag between $200 million and $500 million. The fix called for installing around 300 micro piles, made of concrete and steel, driven to bedrock. A new plan has reduced that overall cost to remedy and will have much less impact on residents.
Alaska is a very interesting state, because it really doesn’t follow the typical rules when it comes to wages or cost of living. Although the country’s biggest state by area and the least dense in population, it’s cost of living is still 30% higher than the national average. Unlike Hawaii, though, Alaska is more than able to make up for that cost of living with higher average wages.
Nevada, the home to seemingly every construction related conference in existence, lands at #15 on our list. Although it’s a fairly large state by geographical size, nearly 75% of all of its residents reside in Clark County, which is home to Las Vegas and surrounding suburbs. Perhaps because of that, in addition to their large tourism traffic, Nevada’s cost of living is around 5.4% higher than the national average, which dropped its ranking slightly.
At the National Safety Council Congress & Expo on October 23, 2018, OSHA’s deputy director of Directorate of Enforcement Programs, Patrick Kapust, announced their 10 most frequesntly cited safety violations for their fiscal year 2018.
On March 15, 2018, 6 people were killed and 8 others were injured when an under construction pedestrian bridge collapsed in Florida. Several months later, the National Transportation Safety Board (NTSB) released their preliminary report while conducting an official investigation. The NTSB later issued an “Investigative Update” to their preliminary report in August. In Mid-November, the NTSB released a 2nd investigative update, narrowing their root cause theories.
Despite being located in the Northeast, the state of Delware is a relatively affordable place to live. According to MERIC data, the cost of living in Delaware is only 2.2% higher than the national average and is the lowest in the Northeast.
The long delayed rule for crane operator certification has new life as OSHA has issued yet another final rule, after making alterations and clarifications. OSHA originally planned to require all crane operators to obtain certifications in 2010, but it has been delayed several times since then. A different final rule was proposed in 2017, but it was announced in May of 2018 that the administration intended to alter the rule.
Another year is about ready to wrap up as the holiday season is upon us. It’s the most wonderful time of the year, but it can be stressful for those in your life that are hard to buy for, especially those in the construction ideas. Our goal is to make that process easier for you or your loved one with our top picks for gifts every year!
In regards to technology, the construction industry is going through a very exciting time. While maybe on a smaller scale, it’s my belief that we’re in the middle of our very own Microsoft vs Apple battle circa the 80s and 90s. Several leading software companies are vying for that top spot in our industry right now and it’s becoming more and more clear who will come out on top by the day.