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What’s It Cost? – May 2015

Construction costs remained relatively stable through the first quarter of 2014, with prices for construction put in place rising at the same rate as consumer inflation and increasing significantly faster than the overall producer price index (PPI). Depressed crude oil prices have more than offset any modest inflation in other products. The measures of price inflation are showing that the lingering after effect of the recession is putting upward pressure on prices.

There is also a divergence of opinion about prices between the government’s data and the survey responses from industry professionals, particularly in forward-looking surveys.

Bureau of Labor Statistics (BLS) reported on April 14 that the PPI for overall final demand increased 0.4 percent in March but decreased 0.8 percent over 12 months. The PPI for final demand construction, not seasonally adjusted, was flat in March and rose 1.9 percent over 12 months. The overall PPI for new nonresidential building construction rose two percent year-over-year. In the major categories of building types the year-over-year increases ranged from 1.2 percent (for healthcare

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