Fencepost - March/April 2018 - 25

CONSTRUCTION COSTS ESCALATE IN FEBRUARY AS STEEL AND ALUMINUM PRICES JUMP; TARIFF INCREASES THREATEN
TO MAKE MANY PROJECTS UNAFFORDABLE
Construction costs escalated in February,
driven by price increases for a wide range
of building materials including steel and
aluminum, according to an analysis by the
Associated General Contractors of America
of Labor Department data released recently.
Association officials warned that newly
imposed tariffs on those metals will create
steeper increases that will squeeze budgets
for infrastructure, school districts and commercial projects.
"Price increases have accelerated for
many construction materials in the last
two years, with additional increases already
announced, and others on the way as soon
as tariffs on steel and aluminum take effect,"
said the association's chief economist, Ken
Simonson. "Contractors will be forced to
pass these cost increases along in bid prices,

but that will mean fewer projects get built.
And contractors that are already working
on projects for which they have not bought
some materials are at risk of absorbing
large losses."
The producer price index for inputs to
construction industries - a measure of
all goods and services used in construction projects including items consumed
by contractors, such as diesel fuel - rose
0.6 percent in February alone and 4.4 percent
over 12 months. The index increased by
4.2 percent in 2017 and just 0.9 percent in
2016, the economist noted.
"Many materials contributed to the latest
round of increases," Simonson observed.
"Moreover, today's report only reflects
prices charged as of mid-February. Since
then, producers of steel and concrete have

implemented or announced substantial
additional increases, and the huge tariffs
the President has imposed will make steel,
aluminum and many products that incorporate those metals even more expensive."
From February 2016 to February 2017, the
producer price index rose 11.6 percent for
aluminum mill shapes, 4.8 percent for steel
mill products and 10.0 percent for copper
and brass mill shapes. Metal products that
are used in construction include steel bars
(rebar) to reinforce building and highway
concrete; piles and beams (structural steel)
in buildings; steel studs to support wallboard
in houses and buildings; steel and copper
pipe; and aluminum window frames, siding
and architectural elements. Several other
products that are important to construction
Continued on page 66

JANUARY CONSTRUCTION
STARTS SLIP 2 PERCENT

The January statistics produced a reading of 154 for the Dodge Index (2000=100),
compared to December's upwardly revised
156. During 2017, the pattern of construction starts frequently showed an up-anddown pattern, which was present towards
the end of last year when the Dodge Index
fell to 138 in November followed by 156 in
December. The 154 reading for the Dodge
Index in January, along with December's
156, shows construction starts climbing
back close to last year's mid-range of activity. For 2017 as a whole, the Dodge Index
averaged 159.
"Although the expansion for the construction industry lost some momentum during
2017, on a broad level it can be characterized
as deceleration as opposed to decline," stated
Robert A. Murray, chief economist for Dodge
Data & Analytics. "January's level of activity,
which held close to last year's mid-range, is
consistent with the picture of a decelerating
expansion. The factors affecting construction
activity going forward in 2018 have become
more varied. Some dampening may come
from higher material prices and tight labor
markets, yet while interest rates are rising
the increases are expected to stay moderate
this year. The tax reform legislation is anticipated to lift economic growth in the near
term, which may benefit commercial building and manufacturing construction starts.

The Trump administration has provided the
outline of an infrastructure program, but the
details need to be worked out by Congress
against the backdrop of a growing federal
budget deficit, which may limit any benefit
this year for public works. One plus for 2018
is that the institutional side of nonresidential building should stay close to last year's
elevated pace."
About Dodge Data & Analytics: Dodge
Data & Analytics is North America's leading provider of analytics and softwarebased workflow integration solutions for
the construction industry. Building product manufacturers, architects, engineers,
contractors and service providers leverage Dodge to identify and pursue unseen
growth opportunities and execute on those
opportunities for enhanced business performance. Whether it's on a local, regional
or national level, Dodge makes the hidden
obvious, empowering its clients to better
understand their markets, uncover key
relationships, size growth opportunities
and pursue those opportunities with success. The company's construction project
information is the most comprehensive and
verified in the industry. Dodge is leveraging its 100-year-old legacy of continuous
innovation to help the industry meet the
building challenges of the future. To learn
more, visit www.construction.com. ■

The value of new construction starts in
January receded 2 percent to a seasonally
adjusted annual rate of $725.9 billion, easing
slightly after December's 13 percent hike,
according to Dodge Data & Analytics. The
nonbuilding construction sector, comprised
of public works and electric utilities/gas
plants, pulled back 18 percent after surging
45 percent in December, as that month was
boosted by the start of the $2.3 billion I-66
Corridor Improvements Project in northern
Virginia and a $992 million transmission
line project in California. At the same time,
nonresidential building edged up 1 percent
in January, supported by groundbreaking
for the $1.3 billion domed stadium in Las
Vegas, Nevada, that will be the new home
for the NFL Oakland Raiders once construction is completed prior to the 2020
season. In addition, residential building
climbed 7 percent in January, helped by
a rebound for multifamily housing after
three straight months of declines. On an
unadjusted basis, total construction starts
in January were $52.2 billion, down 7 percent from the same month a year ago. On
a 12-month moving total basis, total construction starts in the 12 months ending
January 2018 were up 2 percent from the
12 months ending January 2017.

www.americanfenceassociation.com | 25 | March/April 2018


http://www.construction.com http://www.americanfenceassociation.com

Table of Contents for the Digital Edition of Fencepost - March/April 2018

EDITOR’S NOTE
EXECUTIVE DIRECTOR’S MESSAGE
PRESIDENT’S MESSAGE
OFFICERS AND BOARD OF DIRECTORS | CHAPTER PRESIDENTS COMMITTEE
FENCELINES
IN MEMORIAM
FENCE PROFESSIONALS FLOCK TO PHOENIX FOR FENCETECH 2018
ON THE FENCE
MINDING YOUR BUSINESS
CANINE CRIBS
SAFETY IN PARADISE
AFA BESTOWS TOP HONORS AT FENCETECH 2018
VMA
WORKPLACE RESOLUTIONS FOR THE NEW YEAR
MEMBER SAVINGS PROGRAM
NEW MEMBERS
MEMBERS ON THE MOVE
CALENDAR
CHAPTER NEWS
INDEX TO ADVERTISERS
Fencepost - March/April 2018 - Intro
Fencepost - March/April 2018 - cover1
Fencepost - March/April 2018 - cover2
Fencepost - March/April 2018 - 3
Fencepost - March/April 2018 - 4
Fencepost - March/April 2018 - 5
Fencepost - March/April 2018 - 6
Fencepost - March/April 2018 - 7
Fencepost - March/April 2018 - 8
Fencepost - March/April 2018 - 9
Fencepost - March/April 2018 - 10
Fencepost - March/April 2018 - 11
Fencepost - March/April 2018 - 12
Fencepost - March/April 2018 - EDITOR’S NOTE
Fencepost - March/April 2018 - 14
Fencepost - March/April 2018 - EXECUTIVE DIRECTOR’S MESSAGE
Fencepost - March/April 2018 - 16
Fencepost - March/April 2018 - PRESIDENT’S MESSAGE
Fencepost - March/April 2018 - 18
Fencepost - March/April 2018 - OFFICERS AND BOARD OF DIRECTORS | CHAPTER PRESIDENTS COMMITTEE
Fencepost - March/April 2018 - FENCELINES
Fencepost - March/April 2018 - 21
Fencepost - March/April 2018 - 22
Fencepost - March/April 2018 - 23
Fencepost - March/April 2018 - 24
Fencepost - March/April 2018 - 25
Fencepost - March/April 2018 - IN MEMORIAM
Fencepost - March/April 2018 - 27
Fencepost - March/April 2018 - FENCE PROFESSIONALS FLOCK TO PHOENIX FOR FENCETECH 2018
Fencepost - March/April 2018 - 29
Fencepost - March/April 2018 - ON THE FENCE
Fencepost - March/April 2018 - 31
Fencepost - March/April 2018 - 32
Fencepost - March/April 2018 - 33
Fencepost - March/April 2018 - 34
Fencepost - March/April 2018 - 35
Fencepost - March/April 2018 - MINDING YOUR BUSINESS
Fencepost - March/April 2018 - 37
Fencepost - March/April 2018 - CANINE CRIBS
Fencepost - March/April 2018 - 39
Fencepost - March/April 2018 - SAFETY IN PARADISE
Fencepost - March/April 2018 - 41
Fencepost - March/April 2018 - 42
Fencepost - March/April 2018 - 43
Fencepost - March/April 2018 - 44
Fencepost - March/April 2018 - 45
Fencepost - March/April 2018 - AFA BESTOWS TOP HONORS AT FENCETECH 2018
Fencepost - March/April 2018 - 47
Fencepost - March/April 2018 - 48
Fencepost - March/April 2018 - 49
Fencepost - March/April 2018 - 50
Fencepost - March/April 2018 - 51
Fencepost - March/April 2018 - 52
Fencepost - March/April 2018 - VMA
Fencepost - March/April 2018 - WORKPLACE RESOLUTIONS FOR THE NEW YEAR
Fencepost - March/April 2018 - 55
Fencepost - March/April 2018 - 56
Fencepost - March/April 2018 - 57
Fencepost - March/April 2018 - 58
Fencepost - March/April 2018 - MEMBER SAVINGS PROGRAM
Fencepost - March/April 2018 - NEW MEMBERS
Fencepost - March/April 2018 - 61
Fencepost - March/April 2018 - 62
Fencepost - March/April 2018 - CALENDAR
Fencepost - March/April 2018 - CHAPTER NEWS
Fencepost - March/April 2018 - 65
Fencepost - March/April 2018 - INDEX TO ADVERTISERS
Fencepost - March/April 2018 - cover3
Fencepost - March/April 2018 - cover4
https://www.nxtbook.com/naylor/FENS/FENS0318
https://www.nxtbook.com/naylor/FENS/FENS0218
https://www.nxtbook.com/naylor/FENS/FENS0118
https://www.nxtbook.com/naylor/FENS/FENS0617
https://www.nxtbook.com/naylor/FENS/FENS0517
https://www.nxtbook.com/naylor/FENS/FENS0417
https://www.nxtbook.com/naylor/FENS/FENS0317
https://www.nxtbook.com/naylor/FENS/FENS0217
https://www.nxtbook.com/naylor/FENS/FENS0117
https://www.nxtbook.com/naylor/FENS/FENS0616
https://www.nxtbook.com/naylor/FENS/FENS0516
https://www.nxtbook.com/naylor/FENS/FENS0416
https://www.nxtbook.com/naylor/FENS/FENS0316
https://www.nxtbook.com/naylor/FENS/FENS0216
https://www.nxtbook.com/naylor/FENS/FENS0116
https://www.nxtbookmedia.com