Saturday, November 05, 2005

Did Hurricanes Double Construction Costs?

Or are they a convenient excuse for doubling contractor fees? (Take that, Fox News -- implication by question).

The Associated General Contractors of America is claiming that the hurricanes of the last two years, in combination with higher fuel costs, have caused a spike in construction costs.

Before the storms hit, the prices of construction materials had barely
budged, with gains of just a few percentage points.
Another factor affecting building materials costs is the demand for them associated with record construction of new homes and other sites. Much of gypsum's double-digit increase is due to shortages as hotel and retail construction added to demand from new home building.

It seems to make sense, and I buy the part about fuel costs for equipment.

However, a reliable source who has sold building materials to contractors for more than twenty years says the only significant price increase has been in concrete, that there is no shortage of building materials, and the costs for this time of year are not much different than any other year.

If the materials aren't costing the building suppliers much more money, then the materials shouldn't be costing the contractors, who shouldn't be passing on the prices to clients.

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