Disparate Trends Give Sobering Outlook

February 10, 2010

Contractors Prices Down - Price of Goods Going Up

From: Data Digest by the AGC's Ken Simonson

Real investment in private nonresidential structures fell 15%, the sixth straight quarterly decline and only a slight improvement over the 18% decrease in the third quarter. Real private residential investment increased 5.7%, following a 19% gain in the third quarter. Real government investment in structures slipped 5.0%, following an 8.6% rise. The GDP price index rose 0.6% (SAAR), after inching up 0.4% in the third quarter. The price index for private residential structures fell for the fourth quarter in a row, by 2.2%, following 10% declines in the second and third quarters. The price index for residential investment increased 2.2%, after a 2.7% drop in the third quarter. These disparate trends suggest nonresidential contractors are still delivering projects at lower prices even though the prices of goods and services are rising slightly.