During the past year the cost of materials needed to build
a single-family home has escalated significantly. A July 2004
survey performed by the National Association of Home Builders
(NAHB) estimates these increases at $5,000 to $7,000 per new
home.
As the use of concrete has grown, cement shortages have surfaced
in a number of states. However, concrete price increases account
for a meager $283 (5.7 percent) of the $5,000 to $7,000 estimate.
During the time period of the NAHB study, concrete prices
had increased by 4.6 percent. Year-to-date the Producer Price
Index from the Bureau of Labor Statistics reports an 8.4 increase.
Aside from concrete, building a home requires a multitude
of other building materials including lumber, steel, gypsum,
copper tubing, and plastic plumbing products. All of the materials
have recorded double-digit annual increases compared to year-ago
levels. These building materials, as well as other construction
products, have contributed to the cost increase in single-family
construction. Lumber price escalation accounts for more than
half of NAHB’s estimated building material cost increase.
Concrete costs represent slightly more than 4% of estimated
overall home construction costs and less than 2.5 percent
of the price of a new home on the market estimated by the
Bureau of Census at $274,200. Moreover, concrete has experienced
a real price increase of 0.1% during the past four years when
discounting for inflation.
Cement and Concrete
Although the terms cement and concrete often are used interchangeably,
cement is actually an ingredient of concrete. Concrete is
basically a mixture of aggregates and paste. The aggregates
are sand and gravel or crushed stone; the paste is water and
portland cement. Portland cement is not a brand name, but
the generic term for the type of cement used in virtually
all concrete, just as stainless is a type of steel.
More information is available online at the following link:
About PCA
Based in Skokie, Ill., the Portland Cement Association represents
cement companies in the United States and Canada. It conducts
market development, engineering, research, education, and
public affairs programs.
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