March 16, 2009—Reductions in demand caused by the current economic crash have begun reversing the steep increases in material prices experienced in the last several year, says the American Institute of Architects (AIA).
Though this has dropped overall building price tags significantly, tight credit markets and hesitancy to make capital expenditures have stymied clients’ and owners’ efforts to capitalize on these lower rates, says the association.
With construction activity expected to decline 11 percent in 2009, large firm principals, cost estimators, and building industry economists say falling material prices aren’t much of a silver lining in this current cloud of recession.
“As good as this story is, it’s still swamped by the generally grim economic news,” says Ken Simonson, chief economist with the Associated General Contractors. But, “I think it’s a great time to be doing construction. Not only are material costs down, but you have your pick of competent contractors.”
Architects and economists point to the sluggish credit market as the prime culprit restraining clients and owners from taking advantage of lower prices.
For more information, see the AIA Web site.
