After a year marked by numerous price spikes, construction costs declined in December but remained elevated compared to year-earlier prices, while prices of new buildings also moved higher, according to an analysis by the Associated General Contractors of America of new Labor Department data. Association officials noted that the cost of many construction projects is increasing as firms cope with labor shortages and increased costs for many of the materials they need for projects.
“Steep declines in fuel prices in December offset mixed costs for other construction inputs, but most materials and services posted higher year-over-year increases than in 2017,” said the association’s chief economist, Ken Simonson. “The price index for new building construction outpaced the input cost index at the end of the year, but many contractors were probably caught by unexpected cost increases in 2018.”
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