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Construction in Wyo. Keeps Pace Despite Rising Costs

Sun September 16, 2007 - West Edition
Construction Equipment Guide

CHEYENNE, Wyo. (AP) The pace of construction in Cheyenne hasn’t slowed despite national increases in the cost of materials.

Construction costs nationwide are expected to increase by between 6 percent and 8 percent this year, the Associated General Contractors of America predicts. That’s more than double the general rate of inflation.

Wally Reiman, president of the Wyoming Contractors Association, said the trend is hitting home here.

Reiman said the cost of raw materials such as cement and steel has increased sharply over the past five years. He said the cost of copper has jumped 40 percent, raising the cost of electrical and plumbing work.

“People have been arrested for stealing copper from buildings under construction,” Reiman said. “There is a limited supply out there. There is only so much cement. And we just haven’t built any cement plants in the U.S. for a long time.”

Reiman said high energy costs also contribute to increased costs. Gas prices add to expenses while asphalt also is an oil-based product.

International demand for building materials also is raising costs. The United States is shipping materials to countries such as China, India and Canada.

Roger Gutierrez of ACME Construction said he has seen market fluctuations in the past, but nothing this dramatic. He said every construction material he uses is 35 percent to 40 percent more expensive than it was a year ago.

Gutierrez said higher rates haven’t hurt business. But he said some customers don’t understand why final estimates are so high.

Whatever their cause, higher construction costs haven’t slowed the pace of building in Cheyenne.

Reiman said local contractors are building new restaurants, schools and shops. More than three dozen projects are ongoing in the city.

All that construction is itself contributing to the increase in prices, Reiman said.

Reiman said it’s difficult to find enough workers to complete projects. And the construction industry has stiff competition.

Wyoming businesses are losing employees to the oil and natural gas industry. High-paying positions in the drilling fields also are making it difficult to recruit new laborers.

Reiman said he doesn’t expect the situation to change anytime soon. But while costs are up, he said Wyoming cities like Cheyenne and Casper are booming and said growth is good for business.

“The economy is good even with those [price] increases,” Reiman said. “It just costs more.”

Bill Edwards of Edwards Construction agreed Wyoming has lost a lot of tradespeople.

“It’s become a bidding war,” Edwards said.

Neighboring states aren’t offering much help. Subcontractors in Colorado, Nebraska and Montana have enough work to keep them busy at home.

Edwards said increased design standards also are requiring projects to take more employees, plans and time.

While some customers accept higher costs, Edwards said not everyone does. He said his business has completed preliminary budgets for potential builders who never return.

“I think there are a lot of customers we don’t hear about,” Edwards said. “They’ve decided not to build, and it’s small business owners, dentists, doctors — people from all facets of business.”

Edwards said he believes the nation is due for a market slowdown, but said prices have continued to rise long after he predicted they would begin to slump. He said he thinks recent increases in home foreclosures and a residential building slump could be the first indication that construction prices may begin to decrease.

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