June’s steady price index reflected increases for some products being counteracted by decreases for other products. Reed reports that prices rose for gypsum, trucks, bricks, concrete, and plastics, while prices dropped for lumber, diesel, and many metals. Diesel has been steady in July, however, which may contribute to a net rise for construction materials in the near future. The expected increase is also due to broader factors as federal stimulus spending slows and local governments tighten their budgets for the coming fiscal year.
Unfortunately, the price index affects more than contractors and project owners. Architects and engineers could feel the pull as remediation costs go up. Recently completed projects or projects that are currently underway are especially vulnerable. At the time of a design error, the material costs might have been lower; at the time of remediation, the costs might be higher. The professional’s liability policy will, of course, cover those costs that are due to negligence (as the policy stipulates). Nevertheless, as material prices continue to climb, insurance premiums may need to rise to meet the added risk.