Prices are Stabilizing - at High Levels

It started with steel. The construction industry had enjoyed a decade of relative price stability, but starting in late 2003, it was hit with the largest price increases for materials since the early 1970's. The causes were many, but the most significant factors related to China's superheated economy. China's insatiable demand for steel meant it not only started to devour the world's supply of scrap steel, but also halted its coke exports. These conditions, and the resulting price trend, have continued well into 2004, with steel prices escalating between 20% and 60% in the first quarter. Other materials were not unaffected. Rises in the price of structural steel, rebar, and steel pipe were accompanied or followed by increases in the cost of lumber, plywood, drywall, insulation, copper, stainless steel, and fuel.