Prices for diesel fuel, structural steel, lumber and gypsum-wallboard products started to stir during the first quarter, but most increases were coming off dismal lows in 2009 and were not strong enough to break the stranglehold the recession has on construction costs. Eleven of 15 major industry cost indexes tracked by ENR showed costs falling below a year ago. These drops included year-to-year declines of 5.8% for warehouse construction, 4.7% for office buildings and 1.7% for school construction, according to the U.S. Commerce Dept.’s January cost indexes. The agency also reported in January another 3.6% decline in homebuilding costs during the same time in 2009. This decrease marked the third consecutive year the Commerce Dept. cost index for new homebuilding has declined, following drops of 3.2% in 2009 and 2.6% in 2008.
The deepest cost declines were measured by selling price indexes, which reflect the stiff competition between subcontractors and their dwindling margins. Among commercial price indexes, one issued by Turner Construction Co. fell 0.5% this quarter and 7.7% for the year. The Rider Levett Bucknall selling price index also fell 0.5% for the quarter and is down 7.3% for the year.