|UPDATE - (3/22/2004 Issue)|
The tremendous surge in steel prices during the first quarter has the industry talking. At the Associated General Contractors national convention in Orlando recently, many contractors said the soaring prices seemed to come out of the blue.
But ENRs Senior Economics Editor Timothy Grogan was writing about it last December, while forecasting ENRs cost indexes. He predicted that steel would become the primary driver for inflation, noting that "fabricators would not be able to absorb higher mill prices in 2004" (ENR 12/22/03 p. 29). ENRs cost forecast called for steel prices to rebound. Thats what happenedand then some.
"Three months ago, I put a 6% increase for the steel component of the indexes in our forecast," says Grogan. "The steel component is already up double that, but at least I was going in the right direction."
Current market conditions also are focusing attention on ENRs price data, which is compiled by Grogan and Research Assistant Rona Nadi Wafajow. "Ive been doing this a long time and have never seen such intense interest from our readers in any other topic," says Grogan.
Readers have been clamoring for more. Price increases for ENRs materials tend to lag the marketplace by a few months because of the collecting and verification process, which is handled by Wafajow. "When we see large increases like this, we have to make sure they are not just aberrations," says Wafajow, who has worked at ENR for 14 years. "We dont just throw numbers into the indexes without checking."
Wafajow comes to ENR from Afghanistan. "I really feel what we do here is important," she says. "When I look at Afghanistan today, I can see what an important role construction plays in making a country a good place to live."
Grogan, a 23-year ENR veteran, says that he planned major coverage for this Cost Report so that he could compare the dramatic swing in steel prices to the increases of the previous quarter and to a year ago when ENRs prices were actually declining.
ENR Costs Guru Grogan Saw the Steel Price Hike Brewing
March 22, 2004