US construction costs have increased for the 31st consecutive month, according to research from forecasting firm IHS Markit and the Procurement Executives Group (PEG).
The company said that the Engineering and Construction Cost Index registered 63.8 this month, up from 58.2 in April 2019.
It said that, of the essential components monitored in the materials and equipment costs sub-index, 11 have been reported by survey respondents as having an increase in price.
Deni Koenhemsi, IHS Markit’s senior economist for pricing and purchasing, said, “Nationally, concrete prices are growing 2% year-over-year, though rates are close to 3% in regions such as the southern US, where demand is higher.
“However, if we look at the final price of the delivered product, incorporating labor and overhead costs, we see an increase of 8% year-over-year nationally and 11% in the southern US. This is indicative of factors outside of material shortages – a tighter labour environment, truck shortages and regional demand – driving the price increases.”
IHS said the materials and equipment index also rose in May. It reached 65.4 while the subcontractor labor index increased from 56 in April to 60.1 this month. The company said survey respondents indicated a tight labour market for all skilled trade workers.
According to the company, labour costs rose in all regions of the US and stayed flat in both Western and Eastern Canada.
IHS said these latest figures indicate that the current prices for materials and labour are expected to continue to rise.