Inflation Flashes Its Pointed Teeth
Is inflation here? Maybe not. But it sure looks like it, based on these reports.
Asphalt – suppliers raised prices 3% to 15% in the week of May 22, according to an asphalt newsletter quoted in The Data DIGest (from the Associated General Contractors of America).
Asphalt prices – dirt driveways may make a comeback in Maryland, according to the Baltimore Business Journal (6/16), thanks to an increase in the per-ton price of asphalt from $220 one year ago to nearly $372 today.
Construction costs – the Turner Building Cost Index, reported before the quarter ends, said Q2 construction costs would rise 2.75% from Q1 2006 – and 11.89% from one year earlier (as reported on www.buildings.com
Construction PPI – the producer price index for construction materials and components rose 7.8% from 6/1/05 to 5/31/06, according to a Bureau of Labor Statistics report (reported in The Data DIGest).
Construction pay – “Contractors have more work than they have people to do this work” and anticipate average salary increases of 3.97% this year, according to Engineering News-Record (6/26). ENR based its reporting on figures compiled by PAS, Inc. – which thinks selected markets (such as Las Vegas) might see much higher increases. In Vegas, the salary increase is projected to hit 7%.
Copper – “Copper prices dropped 30% as the speculative bubble burst,” according to James Haughey, chief economist for Reed Construction Data, writing 6/20. “However, pipe, tube, and wire prices will remain well above the 2005 level through next year.”
Global sign – “after rising in each of the past five months, the Global Manufacturing Input Prices Index hit a 19-month high,” according to the JP Morgan Global PMI report (6/1).
Biofuels & BP – BP (which used to stand for British Petroleum, didn’t it?) will invest $500M over the next 10 years in biofuels.
CHP = DG – a subsidiary of Distributed Energy Systems Corp. will built a 1 mW combined heat and power facility at the San Bernardino Processing & Distribution Center of the U.S.
Postal Service (in Redlands, Calif.). To be built at a cost of $2.5M, the CHP unit will provide 80% of the postal facility’s electrical power demand, according to a release.
Larger houses, higher bills – Americans have been choosing to buy larger houses (and builders are building them). According to an article on Marketwatch.com, no matter how “green” your home might be, “the larger the house, the more energy it uses.” According to NAHB statistics, the average size of a new home in 2005 was 2,433 sq. ft. It was 2,349 in 2004 . . . 1,905 in 1987 . . . and only 1,660 in 1973. At the same time, the average U.S. household reportedly has fewer people!
Motor efficiency – it’s the focus of industrial facilities that want to cut energy costs, according to a recent article in Plant Engineering magazine
. See the graphic below.
PV at the dump – Florida power & Light will build a 250 kW solar photovoltaic array at the closed Bee Ridge Landfill (Sarasota, Fla.), according to the South Florida Business Journal (4/14).
Solar cell manufacturing – Nanosolar (Palo Alto, Calif.) is a privately held five-year-old company that started up with seed money from the founders of Google. The company will build the largest solar-cell manufacturing facility in the world in the San Francisco Bay Area – to be sited in one of three locations. “The factory could turn out enough solar cells each year to generate 430 mW of electricity,” according to the 6/20 report in the San Jose Mercury News. As of right this minute, all of the operating solar PV-making plants in the U.S. combined turn out only 153 mW worth of solar cells annually.
World energy demand – worldwide marketing energy consumption will grow by 71% from 2003 to 2030, according to the Energy Information Administration’s International Energy Outlook 2006. According to the EIA: “Projected reference-case world oil prices are 35% in 2025 than in last year’s IEO, reflecting a more pessimistic view of the willingness of oil-rich countries to expand production capacity as aggressively as previously envisioned.”