New construction costs are continuing to increase. From January 2004 to February 2005, new construction costs have increased 10.6%, mainly due to material price increases. Whereas materials used to account for 50% of construction costs, materials now represent 55% of total costs.
The largest price increase has been with steel products. Since January 2004, steel mill products have increased in price by 46.2%. Other cost increases in the past 13 months include:
|Gypsum (includes wallboard)||20.9%|
|Lumber & wood products||11.4%|
Generally, new construction costs were increasing less than inflation or more or less in step with it until 2004, when prices starting shooting skyward.
These price increases are sure to have a significant impact on the feasibility
of many new LBE projects.