IHS MARKIT LTD. All materials and equipment sub-index components indicate price increases for the first time since July 2018
January 27, 2021
WASHINGTON, D.C. (January 27, 2021) - Engineering and Construction costs continued to rise in January, marking the third consecutive month of increases, according to IHS Markit (NYSE: INFO) and the Procurement Executives Group (PEG). This month's headline IHS Markit PEG Engineering and Construction Cost Index registered 63.1. The materials and equipment portion of the index reached 68.3, up 4.9 points from the previous month, recording the second straight month of reported price increases. The subcontractor labor index came in at 51.1, indicating that labor price increases were not as widespread as in December.
Survey participants witnessed price escalations for all categories under the materials and equipment sub-index for the first time since July 2018. Copper prices continued to increase for the seventh month in a row. Ocean freight from Asia to the United States recorded its fifth month of price increases. The carbon steel pipe price index rose to a figure of 70 in January, up from 50 in December. The swift change from flat pricing to increasing prices was also apparent in heat exchangers and pumps and compressors.
'Prices have picked up for the heat exchangers and pumps and compressors categories due to tighter supply and increasing input costs,' said Thomas McCartin, senior economist, IHS Markit. 'Producers have kept capacity utilization subdued even as new orders have fully recovered to early 2020 levels.'
The sub-index for current subcontractor labor costs came in at 51.1 in January, slightly lower than December's index figure of 55.4. According to respondents, labor costs rose in the Northeastern and Southern United States; they were flat in the Midwest and West. In Canada, labor costs were flat in the Western part of the country, while they fell in the Eastern region.
The six-month headline expectations for future construction costs index registered 76.7 in January, displaying respondents' expectations of continued price increases in the first half of 2021. Both sub-indexes reflected this sentiment, with the materials and equipment sub-index reaching 80.1 this month. The six-month expectations index for sub-contractor labor recorded a reading of 68.8 in January, with labor costs expected to increase in all regions of the United States and Canada.
Most survey responders did not report any shortages for materials and equipment.
To learn more about the IHS Markit PEG Engineering and Construction Cost Index or to obtain the latest published insight, please click here.
####
About IHS Markit (www.ihsmarkit.com)
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2020 IHS Markit Ltd. All rights reserved.
If you prefer not to receive news releases from IHS Markit, please email katherine.smith@ihsmarkit.com. To read our privacy policy, click here.
News Media Contact:
Kate Smith | Press Team |
IHS Markit | press@ihsmarkit.com |
+1 781 301 9311 | |
katherine.smith@ihsmarkit.com |
Attachments
- Original document
- Permalink
Disclaimer
IHS Markit Ltd. published this content on 27 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2021 15:37:01 UTC
