Associated General Contractors Of America - Construction Input Costs For NYC Will Rise 8% In 2008

[hatrack]

October 9, 2007
New York City's building boom may be brought to a halt by something more mundane than monetary policy or global financial disruptions — it could be as simple as copper, diesel, and steel.

By the end of next year, the Producer Price Index for construction inputs — the price of materials that are used in a construction project plus the cost of diesel fuel — will rise by as much as 8% and continue to do so indefinitely, according to a report released yesterday by the Associated General Contractors of America (available for download here). This is a drastic change from the previous 12 months, which saw construction inputs inch up just 1.6% for the year ending in August.

"This is a warning note," the chief economist at AGC, Ken Simonson, the author of the report, said. "Even a small percentage change can mean the difference of hundreds of millions of dollars in large projects in New York."

Higher prices for building materials, compounded by a weak dollar and problems in the credit market, could put in jeopardy some of the billions of dollars worth of development projects now under way in the city. Among these projects are the $3 billion expansion of the Jacob K. Javits Convention Center, the $14 billion redevelopment of Pennsylvania Station and Madison Square Garden, and the $2 billion expansion of the no. 7 subway line.

EDIT

Yeah, I know, the Sun . . .

http://www.nysun.com/article/64164