Construction Material and Labor Costs Climb in January, Expected to Increase Through First Half of 2019

Industry Statistics

February 5, 2019

Construction Material and Labor Costs Climb in January, Expected to Increase Through First Half of 2019

Construction costs rose in January according to the IHS Markit PEG Engineering and Construction Cost Index. The Index, which is a leading indicator for material price and wage inflation in the A/E/C industry, stood at 54.4 in January, up from 53.0 in December.

Materials and equipment prices rose in January in eight of the 12 subcomponents tracked by the Index, with ready-mixed concrete and fabricated structural steel pricing remaining flat and carbon steel pipe and alloy steel pipe prices falling.

“Steel pipe prices continue to trend lower across all geographies due to falling steel input costs,” said Amanda Eglinton, principal economist, pricing and purchasing, IHS Markit. “Pipe prices in the United States will also be weighed down by the restarting of quotas on imports from Korea, Brazil and Argentina in early 2019. Price declines will level out by mid-year before moving sideways over the second half of the year, in line with the movement in steel input costs.”

Labor costs increased in all U.S. regions and respondents indicated a tight market for all skilled trade workers.

Looking ahead six months, survey respondents expect both material and labor costs to continue to rise, but at a slower pace than recent months.

For more information about the IHS Markit PEG Engineering and Construction Cost Index, click here.

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