Inflation that was contained through the expansion of the last decade may be crushed by the severe downturn in today's commercial markets. "I'm putting 0% escalation into my current estimates," says Larry Cockrum, president of Ripley, Miss.-based consulting firm Cockrum & Associates and current president of the American Society of Professional Estimators. "I priced a recent job as I normally would and then discounted everything 8% and that is probably where it is going to hit."
Severe competition is more than undercutting the modest increase in direct labor and material input costs reflected by 11 general purpose commercial building cost indexes tracked by ENR. This group of indexes posted an average 0.5% increase this quarter and is up 2.2% from a year ago. This compares to a 0.7% quarterly increase and a 2.4% year-to-year increase during the first quarter of 2002.