NEW YORK North American construction costs rose for the 30th straight month in July amid higher fabricated structural steel prices, although pricing is expected to stabilize for the balance of the year, according to an IHS Inc. research report.
"In our view, price increases for fabricated structural steel will either be light or nonexistent for the rest of 2014 in the United States," the Englewood, Colo.-based company said July 23, noting that cost pressure in other material and equipment categories remain fairly modest.
Recent price increases for fabricated structural steel, which includes welded plate and bridge supports, were due to "artificial tightness in the North American market after a colder and longer than expected winter, as well as unplanned maintenance at two facilities in the Midwest," according to Paul Robinson, IHS senior economist for pricing and purchasing. "With those shocks out of the way, there is little upside for prices on the horizon."
The company did not identify the Midwest facilities to which it was referring.
IHS noted that the engineering and construction cost index (ECCI) was at 55.9 percent in July, softer than the June reading but still in positive territory mainly due to steel-related product gains. Alloy steel pipe recorded the highest reading of all materials and equipment subcomponents of the ECCI in July, a position it has held for five of the past six months, IHS said, attributing this to climbing nickel prices. Meanwhile, copper product prices fell in June.