Ken Simonson, Chief Economist of The Associated General Contractors of America, predicts lower average prices for ‘09 vs. ‘08 for diesel, steel, copper, and lumber. Concrete, asphalt, gypsum, and other wood products, however, could increase in price. His forecast for year-over-year producer price index change is -4% to 0%.
Beyond 2009, however, he foresees continued upward pressure in construction pricing due to high demand worldwide for construction materials, erratic supply growth, and transportation costs. Expect 6-8% PPI increases after 2009 says Simonson.
Since December 2003 Construction PPI has increased by 30% while CPI-U (CPI-Urban Consumers, the more general CPI index) has increased by 16%.
