[NEWS TRACKER] Construction Materials Prices Drop in September Gives Contractors a Breather

ABC Chief Economist Anirban Basu believes materials prices will continue to remain weak absent any major geopolitical event; plus more construction industry news on the October 24, 2019, edition of Construction News Tracker

Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.

A major decision by the EPA dealing with lead in water pipes is seen as having a long-term effect on the nation's infrastructure. The federal agency has determined it needs to change how its rules cover the controversial situation that has left children with increased blood levels of lead and communities facing years of having to deal with tainted water supplies in at least 6 million homes with lead pipes.


The new EPA rules increases the amount of time that municipalities have to replace those tainted pipes from 13 to 33 years but reduces the amount of time customers have to be informed about elevated lead levels from 30 days to 24 hours. Cities ranging from Flint, MI, to Newark, NJ, are affected by the lead pipe issue.

Contractors dealing with filling skilled work positions and higher materials costs are getting a bit of a breather. ABC's analysis of Labor Department Producer Price Index data shows them falling in September by 6/10ths of a percent to a year over year drop of 1.7%.. Nonresidential construction prices have fallen by a similar amount as well.

The ABC analysis places the drop at the feet of lower energy costs notably crude petroleum down 19.2%, natural gas off 34.6% and unprocessed energy materials down by 21.3%.. Only the costs for softwood lumber, steel mill products and plumbing fixtures shows a rise in price. Chief Economist Anirban Basu believes that materials prices will continue to remain weak absent any major geopolitical event.

The collapse of a major construction project near the French Quarter of New Orleans October 12th has left three construction workers dead. The multistory high-rise with 112 workers onsite simply tumbled to the ground leaving piles of rubble behind. Fire rescue crews worked diligently amid unstable scaffolding of the yet to be Hard Rock Hotel and Conference Center by Citadel Builders in the $85 million project.


Thirty construction workers were listed as injured, and some adjacent structures were damaged. Continued unstableness of two cranes on the project is deepening efforts to demolish it and find a cause, although there is widespread speculation over the building process. A video taken before the collapse shows it appears to have pancaked floors onto one another from the top down. OSHA is investigating.

A preventive move by one of the largest public utility companies in the nation, Pacific Gas and Electric in California has left hundreds of thousands without power. Claiming the central and northern regions of the state are exposed to dangerous wildfires and high winds, the utility cut off electricity to 700,000 customers. Contractors complain that projects were curtailed due to the loss of power, and in some cases generators required security personnel for protection.


Windblown power lines sparked some of California's deadliest wildfires in the past two years sending PG&E into bankruptcy. It caused the utility to take the drastic measure to prevent future blazes, and the State Public Service Commission has warned them not to repeat the act.

Mixed outcomes from the September Dodge Momentum Index of commercial building activity has resulted in a 4.1% gain to  a level of 143.6 up from August mark of 137.9. The commercial component registered a rise of 8.9%; however, the institutional component fell 4.8%. For the third quarter of the year Dodge Index averages 140.1 for a very slight increase from the second quarter. Dodge reports the dollar volume of projects is lower than a year ago. The Index is now moving more sideways than downward.

Recalling the failed pedestrian bridge that collapsed near Miami University, the National Transportation Board (NTSB) has released over 6,000 pages of reports dealing with each contractor on the failed project that went down in March of 2018, killing six people and destroying eight cars. The NTSB found that the Louis Berger Group was listed by the Florida DOT as qualified to review design of the bridge when it actually wasn’t.


Now the Florida DOT has passed off the NTSB report by telling firms involved in the ill-fated bridge that they should have done their own technical reviews and not relied on FDOT reports. Figg Bridge Engineers, which designed the bridge, said there was no FDOT cautions that contractors should not rely on their website postings.

Wacker Neuson has decided to exit the power trowel business. The construction division of Husqvarna is acquiring all walk-behind and ride-on power trowels, a $15 million business for Wacker Neuson in 2018. The deal means that Husqvarna will acquire all product, R&D and manufacturing for the complete power trowel line.

In closing, since praise reassures individuals, it helps them neutralize doubts they have about themselves.

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