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02-04-20 | Economic News

Engineering and Construction Costs Continue Their Climb

IHS Markit Index

The Northeast, Midwest and Southern United States saw subcontractor labor costs increasing in the latest monthly report, while the U.S. West, Eastern and Western Canada saw little to no movement.

A score of 59.4 in January marked the 39th month in a row that the IHS Markit PEG Engineering and Construction Cost Index has registered higher prices than the month before. Breaking it down, both the subcontractor labor, and the materials and equipment indices showed a gain, with 10 of 12 components in the latter indicating higher prices. One of the biggest increases was in the price of ready-mix concrete.

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"Ready-mix producers once again sent out higher price quotes this January," said Deni Koenhemsi, senior economist at IHS Markit. "This is in line with the seasonal price increases that typically occur in January and April, depending on the region. For some parts of the United States where demand is higher, prices will rise more than average due to ready-mix truck driver tightness."

The Future Construction Cost Index forecasts increasing prices for the 41st consecutive report but with a score of 75.6, it is only a slight gain from December.

The statement from IHS Markit concludes, "labor costs are expected to rise in all regions of the U.S. and Canada."

Filed Under: CONSTRUCTION, COSTS, ECONOMICS, IHS

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