CPI Rose A Modest 1% In March, Doesn't Cover Spike In Construction Costs
The consumer price index (CPI) for all urban consumers—the most commonly cited measure of inflation—rose 1.0%, not seasonally adjusted (0.5%, seasonally adjusted), in March but only 2.7% over 12 months, BLS reported. The relatively mild rise in the CPI may make it harder for contractors to make owners aware of the spike in construction costs, as everywhere material costs are increasing as well as commodity prices.
“Job creation in the [first] quarter, as well as the outlook for the next six months, is stronger than…in the entire survey history dating back to 1982,” the National Association for Business Economics (NABE) reported today in summarizing responses from 72 corporate economists. “Supporting this growth, both recent results and the outlook for sales and profit margins continue to improve.” Of the 50 respondents who reported on planned spending on structures in the next 12 months, 44% said spending would increase compared with the past 12 months, vs. 20% who said spending would decrease, the third straight quarter in which positive responses outnumbered negative ones.
Industrial production for manufacturing rose for the fourth straight month in March, by 0.7%, seasonally adjusted, according to the Fed. The Fed noted, “the output of construction supplies rose 1.5% in March. This index has risen more than 12% from its trough during December 2009 but remains about 25% below its peak in December 2006.” Capacity utilization in manufacturing climbed for the ninth month in a row to 75.3% of capacity in March, although it remained below the 1972-2010 average of 79.0%. Over time, rising output and capacity utilization generate demand for factory construction.
Source: Data DiGest