Plethora of Price Hikes Plagues Contractors

Materials prices are on the rise. The retail price of on-highway diesel fuel hit a 16-month high of $2.90 per gallon, 86 cents (42 percent) higher than a year ago, the Energy Information Administration reported on Monday. Copper and aluminum futures prices on Monday also neared the highest level since the autumn of 2008. Nucor announced on Monday that it was raising rebar prices $25 per ton immediately and a further $50 on April 1. Wallboard manufacturers announced in February that they would raise prices 20 percent on March 15. Lumber and plywood prices have also touched multi-year highs recently. The Illinois Department of Transportation posted its monthly indexes for bituminous (liquid asphalt) and steel on March 1. The bituminous index climbed for the fifth month in a row to $517.50 per ton, an increase of 35 percent since October and the highest since November 2008. The steel index rose only half a percent, to $43.71 per hundredweight. Nevertheless, this small increase was enough to raise the index to a nine-month high. Although there is still little sign of inflation for the overall economy, construction is vulnerable to fluctuations in world demand for raw materials, which tend to be much more volatile than consumer prices. At this time it appears unlikely that prices will keep rising. But prices for the most part have bottomed out and upward movements are more likely than a return to the lows of late 2008.