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GRAND RAPIDS - The Associated General Contractors of America reported that construction spending hit a record $1.3 trillion in October, and that spending in the three major construction categories was 9 percent higher for the first 10 months of this year compared to the same period last year.
Ken Simonson, AGC's chief economist, said the spending spree was led by an 11 percent gain in private residential spending. Year over year, public construction spending was up 8 percent, and private nonresidential spending was 5 percent higher.
But the price of construction materials remains a major concern. Most districts in the country have reported increasing prices, particularly in the cost of energy-related products, construction and raw materials and transportation. Fuel surcharges, for instance, have become commonplace.
"When the price of diesel goes up, the contractors pay it directly," Simonson said. "They're also paying indirectly in fuel surcharges that are placed on just about every delivery to a job site these days. People also have the misimpression that the oil crisis is over." The one big worry is cost and availability of materials, Simonson said. The industry has seen tight supplies of building materials like PVC (polyvinyl chloride) pipe, rising prices on steel, copper, plastic resins and aluminums, and sharply rising prices on gypsum and cement. In fact, the contractors group is urging the Commerce Department to end the duty on Mexican cement, which has pushed its price up 55 percent.
Simonson said supplies are likely to remain tight next year for concrete and PVC pipe, with periodic spot shortages. He joined Ed...