LOS ANGELES (AP) — U.S. homeowners are spending more on home renovation projects, bucking a broader pullback by consumers amid diminished confidence in the economy.

Sales at building materials and garden supply retailers rose 0.8 percent last month from March, the biggest gain since 2022, and were up 3.2 percent from April last year. At the same time, U.S. retail sales overall rose 0.1 percent, a sharp slowdown from March.

The trend comes even as prices for home improvement products have been rising.

The cost of home repairs and remodeling climbed by nearly 4 percent in the first quarter from a year earlier, according to Verisk’s Remodel Index. The strategic data analytics firm tracks costs for more than 10,000 home repair items, from appliances to windows.

Recent price increases appear to be driven primarily by labor costs and don’t appear to reflect the ongoing trade war that the Trump administration is engaged in with major U.S. trading partners like Mexico, China and Canada.

“We haven’t seen panic buying from contractors or investors concerned about the impact tariffs might have on future costs, or labor rates being driven up by stricter enforcement of immigration policies,” Greg Pyne, vice president of pricing for Verisk Property Estimating Solutions, said in a report earlier this month.

Home Depot said this week that it doesn’t expect to raise prices because of tariffs, saying it has spent years diversifying the sources for the goods on its shelves. However, executive Billy Bastek said some products now on Home Depot shelves may disappear.

He also noted that the chain is seeing fewer customers taking on large home improvement jobs like kitchen and bath remodels, because high interest rates may be dissuading homeowners from borrowing money to finance such projects.

Spending on home renovations has remained resilient as elevated mortgage rates and skyrocketing home prices have frozen out many would-be buyers. That’s kept U.S. home sales in a slump, limiting the market for homeowners who want to sell.

Many homeowners also bought or refinanced their mortgage when the average rate on a 30-year home loan was below 3 percent or 4 percent in the first couple of years of the pandemic. That’s made them reluctant to sell now, when the average rate is hovering near 7 percent.

In response, many homeowners have opted to to invest in sprucing up their home rather than sell and take on a mortgage with a sharply higher interest rate.

A shortfall in new home construction more than a decade in the making has kept people living in older homes longer. Nearly half of the owner-occupied homes in the U.S. were built before 1980 and have a median age of 41 years, according to an analysis of Census data by the National Association of Home Builders. That aging stock of homes has helped fuel the need for repairs and improvements.

Harvard University’s Joint Center for Housing Studies’ most recent quarterly outlook of home improvement projects that spending on home renovations will continue to increase this year, despite economic uncertainty.

Spending by homeowners on maintenance and home improvement projects increased 0.5 percent in the first quarter from a year earlier to $513 billion, according to the JCHS’ leading indicator of remodeling activity, or LIRA.

It also forecasts annual increases from here that will drive spending to $526 billion by the first quarter of next year. That would represent a 2.5 percent increase from the first quarter of this year.

Rising home prices and signs of a solid economy have supported the outlook for higher spending on home improvement, but that could change if the housing market and economic outlook worsen, said Carlos Martín, director of the JCHS’ Remodeling Futures Program.

“Building materials retail sales are strong, but we are seeing a significant downturn in the sales of existing homes and their median sales price since the last projection — both are known contributors to home improvements,” Martin said. “Broader economic turbulence like a recession, a worsening job market or higher inflation would almost certainly temper our expectations.”

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As most people are undoubtedly aware, the construction industry has seen material prices escalate astronomically over the past few months. Some specialty lumber prices have soared upwards of 6,000 percent. The cost of a sheet of plywood is double what it was even six months ago.

Generally, contractors assume the risk of material prices when they sign a lump sum or GMP contract unless there is a material escalation clause included in the contract terms. Thus, many contractors are likely wondering what their options are to try and get paid for some of these price increases, especially if they are mid-project and do not have a material escalation clause in their contract. Consider the following guidance on mitigating damages arising from these significant price increases:

Engage in open dialogue with the owner early

Contractors that are facing significant material price escalation on projects, regardless of whether there is a material escalation provision, should immediately notify the owner to communicate the cost increase issues. There is no substitute for a good candid conversation about all project issues, especially when they are about significant price increases. Generally, owners have been receptive to discussing the material escalation issues facing the industry as a whole and generally understand it is not the fault of their contractors. Open and candid dialogue with a project owner can allow you to resolve and mitigate issues before they significantly impact your project. Demonstrating to the owner that you are doing everything reasonably possible to procure the materials may also serve to redirect the owner’s attention to the distributors and suppliers that are closer to the source of the problem.

Evaluate mitigation opportunities

Oftentimes there are opportunities for the contractor to mitigate damages relating to material escalation (e.g., proposing different materials, purchasing in bulk, etc.). On a recent large project in Portland, the owner and contractor were able to negotiate use of additional storage/laydown areas so all materials could be purchased by the contractor in advance and stored for later use. In fact, the owner agreed to pay for the additional area that was needed to store the materials. In other instances, it may be cost-effective to secure additional off-site storage and buy materials in bulk. These options to mitigate damages should be brought forward and discussed with the owner to see if a reasonable solution can be reached to mitigate damages to the contractor and the project – there are also implications on payment and insurance that need to be considered if you are storing materials. And a reasonable damage mitigation offer that is rejected by the owner will be a helpful data point in the unfortunate event a claim arises in the future.

Address material escalation issues before contracting

If you are negotiating a private project or bidding on a public works project, ask to include a material escalation provision in the contract terms (either through private negotiations or asking the agency to modify the IFB during the public solicitation process). Most contracts do not have a standard material escalation clause, so contractors need to specifically negotiate these. Owners may benefit from these clauses because contractors would be less likely to include large contingencies to account for the risk of material escalations. These material escalation contract terms can be limited to a certain type of material (e.g., the Oregon Department of Transportation specifications contain a specific provision for steel price increases) or all materials, and limited to certain durations of the contract. An example material escalation clause is:

Owner acknowledges that some of the materials that are to be incorporated into the Project have volatile prices (e.g., the prices of wood, steel, aluminum, etc.) that are changing day-to day or even hour-to-hour. Accordingly, Contractor cannot guarantee material prices for any amount of time during the course of this Contract. If material prices deviate more than ___ percent from the time of execution of this Contract to material procurement, Contractor shall be entitled to a Change Order to compensate Contractor for any material price escalation after this Contract is executed.

If a contractor is faced with an existing contract that does not contain a material escalation clause and a difficult owner that is unwilling to work with the contractor to mitigate the damages, and assuming there are no other contract provisions that would entitle the contractor to additional compensation, then the contractor may be able to argue that the significant cost increase caused the contract to become commercially impracticable or impossible, or that there was a unilateral or mutual mistake at that time of contracting.

Depending on the timing of the project and date of the contract, it is also possible that a clause targeted to COVID-19 may provide relief to the contractor. Likewise, the underlying cause of the material shortage or price increase may arguably trigger a contract’s force majeure provision. These claims, however, can be very difficult to prove and any contractor contemplating such arguments should consult with its attorney.

Material escalation is impacting the entire construction industry and all projects at various levels. Contractors should be proactively addressing material cost increases before they become significant problems and cause an otherwise great project to turn into a distressed project.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. None of the authors nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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For general contractors and other construction industry professionals, the cost of doing business could soon rise because of an increasingly hostile trade war between the United States and China.

The Office of the U.S. Trade Representative opted May 10 to increase tariffs on Chinese goods from 10 percent to 25 percent. Those goods include important building materials like alloy and steel. The original 10 percent rate was established in September 2018.

“This is actually a tax that American consumers pay, ultimately,” said Mike Salsgiver, executive director of Associated General Contractors’ Oregon-Columbia chapter. “The sooner you can eliminate tariffs, the better.”

Most people don’t understand that Americans are the victims of tariffs, Salsgiver said. Increases in material prices will just force general contractors to raise prices for their clients, he explained. For this reason, he said, AGC‘s members are generally opposed to any restriction on international free trade.

A study by the Federal Reserve Bank of New York found that the 10 percent duty increase last year brought the typical American household an annual cost of $419. According to the research, the raise in tariffs will bring that cost to $831 this year.

The increase in tariffs to 25 percent was first announced by the Trade Representative in December, with intent that it take effect in March. That announcement had a noticeable impact on the construction industry.

An economic analysis released in April by the National Association of Home Builders found that imports of residential construction materials from China had increased in December by more than 30 percent, just before the Trade Representative’s announcement. In January, those same imports decreased by more than 20 percent, which NAHB attributed to expectations of high tariff rates.

A survey conducted last week by the Monmouth University Polling Institute found that 62 percent of Americans believe consumers will bear most of the damage from Chinese tariffs.

A spokeswoman for Skanska USA, a branch of the world’s fifth-largest construction company, said the firm has not yet made a determination on the potential impact of tariffs, and doesn’t want to speculate without more information.

Ken Simonson, chief economist for the Associated General Contractors of America, likewise said he isn’t sure yet how general contractors will be affected. While he said he does have concerns about the price jump, he added that the magnitude of different goods that make up the industry make it hard to track exactly which impacts will be tangible.

As an example, Simonson said for smaller parts like fasteners, the price difference might be negligible enough that contractors don’t raise costs. Many contractors go through a servicer or distributor, and don’t always pay attention to changes overseas themselves, he added.

Another option, Simonson said, is to make design changes. He pointed to pile drivers, who might switch from steel piles to those made of reinforced concrete. When contractors and engineers come up with alternate solutions, they can avoid passing tariff costs onto consumers.

But alternatives aren’t always available, as trade wars have affected imports even on the same continent. While the Trump administration last month announced that it would lift tariffs on steel and aluminum imported from Mexico and Canada (before imposing a new tariff on Mexican goods to take effect June 10), tariffs are still in effect on Canadian wood. NAHB estimates these restrictions add an average of $9,000 to the price of a new house.

The construction industry is already in a precarious situation, Salsgiver said. While the economy is booming, profit margins have only slightly recovered from where they were during the recession, he said.

Even as the United States and China work toward a solution acceptable to both, it might be too late for American consumers, who could end up stuck with high prices even after the tariffs are reversed.

“Anything that increases costs is going to put downward pressure on what is already a fairly weak recovery,” Salsgiver said. “In our experience it’s pretty rare for costs to go the other direction, unless you’re in a recession.”

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Rows of cardboard boxes filled with building material samples in the library at the University of Oregon‘s Portland center don’t look like much – yet.

But head librarian Karen Munro has grand plans. Soon the samples will be organized and displayed on shelves to serve as visual and tactile references for architecture students and Portland-area design professionals.

“The challenge is taking it from a big pile of stuff to a collection with some order,” Munro said. “We know a materials collection is pretty important for architecture students … It really comes out of the curriculum – the professors asking students to handle materials.”

There is an extensive materials library at the University of Oregon School of Architecture and Allied Arts in Eugene, but the Portland satellite campus lacked a similar counterpart, she said. As a result, the UO Portland Library and Learning Commons about a year ago began accepting material sample donations from architecture firms and building supply manufacturers.

This spring, the collection got a large boost when MulvannyG2 Architecture decided to donate its Portland materials library to the university. The firm is closing its Portland office and so its library needed a new home, MulvannyG2 spokeswoman Jessica Biel said.

“We’ve had a long-standing relationship with (the University of Oregon),” she said. “It was the perfect place to donate that.”

MulvannyG2’s donation fueled a renewed push to establish a materials library at the Portland campus, said Nathan Erwin, a graduate architecture student and co-president of the university’s Portland Student Action Council.

“We got this influx of materials (and) it kind of sparked that this was something that we could expand on,” he said. “Because we got this big donation, it really opened up our eyes.”

Unlike the Eugene materials library, which has a heavy interior design focus, the Portland collection will cater to students studying urban and sustainable architecture, Munro said. Instead of fabrics and other interior materials, much of the Portland collection consists of exterior finishes and wood, glass, stone and metal building components.

Physical access to these types of materials will prove invaluable to Portland architecture students, especially as they complete their thesis projects, Erwin said.

“It really takes a lot of research,” he said. “Having that (library) downstairs helps students not play guess and check. A lot of times with renderings, the materials don’t come through as they would in real life.”

Despite advances in digital rendering software, associate architecture professor Nancy Cheng said she emphasizes to her students the advantage of physically handling and comparing building materials.

“In order to understand what your design would look like, it’s really great to touch and feel the materials that you will be using,” she said. “We want to make sure what we’re designing is appropriate. Having samples gives us a sense of the physical properties as well as the aesthetic properties.”

Shelving and other furniture to accommodate the Portland materials collection should arrive later this summer, Munro said. Unlike the library books, students will continue to borrow the samples using the honor system instead of formally checking them out.

Munro will visit building materials libraries at other universities – perhaps the University of Texas at Austin, California Polytechnic State University and Harvard University – to research displays.

“It requires different expertise than managing, say a book or movie collection,” she said. “We are doing it here really informally at the moment.”

Many architecture firms have their own materials collections, but Portland-area architects may turn to the UO library, which is open to the public, to find samples that they don’t have in-house, Munro said.

“It would be potentially good resource beyond the school,” she said. “We’ll see if this collection sparks some extra interest.”

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SunTerra Homes Inc. spent more than two years building and obtaining a patent for its Energy Block wall system. But there’s another step the Bend-based builder plans to take before the product actually finds a place in energy-efficient homes.

The wall system is headed to Oregon State University in Corvallis, where it will spend some time in a first-of-its-kind, three-chambered climate system.

The Multi-Chamber Modular Environment (MCMEC) system was created with the hope that it will produce data that can be used to develop better, longer-lasting products for the building industry, OSU researchers said.

Oregon State University hired Grand Rapids, Mich.-based Envirotronics Inc. to custom-design and build the $850,000 testing system, which launched in January. Each of the system’s 8-foot-by-8-foot-by-8-foot chambers can be combined into a single chamber. The system has two walls on either end that can be slid aside, allowing larger products to be tested.

Users also can build walls out of different materials and drop them into a two-foot gap between the chambers. Data drawn from the research could lead to better and longer-lasting products for the building industry, OSU researchers say.

For SunTerra, the multi-chamber tests will allow the company to see how its wall system holds up in different physical environments.

“We’re actually duplicating a wall similar to a wall that would be used in a normal building,” said Jim Chauncey, owner and president of SunTerra said. “This is about the only way that you can accomplish true performance for the wall structure.”

During a test, temperatures in the chambers can be set from -30 degrees Celsius to 40 degrees Celsius. Humidity can be adjusted from 10 percent to 95 percent, while solar rays can be varied from 400 solar watts per square meter to 1,200 watts per square meter, researchers say.

Those ranges mean SunTerra Homes could subject its wall system to the conditions of a Wisconsin winter on one side of the wall and a normal living room environment on the other, said Fred Kamke, a professor of wood-based composite science and researcher at OSU’s Green Building Materials Laboratory, where MCMEC is stationed.

“That’s the beauty of it being modular,” Kamke said. “If we want to run all three chambers independently with different tests going on, we can separate the chambers with the insulated wall,” he said. “That’s what makes this system unique. Nobody else has this.”

SunTerra plans to use the results of the test to validate the wall system’s thermal storage capability, which is defined as the amount of heat it can absorb and release of the wall. That test would be difficult to run efficiently without the OSU chamber system, said Jason Ideker, an OSU assistant professor of infrastructure materials.

“A lot of times, testing is done in an environment that is not as tight or snug as what this is,” Ideker said. “They can use the chamber to determine the thermal properties of the wall and how well it is providing insulation.”

The MCMEC system was built using money from several sources, including Oregon BEST, which saw the potential for doing performance research in a controlled physical environment.

“We were interested in supporting both companies that are designing buildings and companies that are designing products to build those buildings, said Joanna Brickman, director of collaboration innovation at Oregon BEST. “The modeling of performance could only tell you so much. Doing physical testing gives so much more confidence.”

Ultimately, the tests done with the MCMEC system will provide evidence of thermal performance and longevity of materials that could replace existing materials with more durable ones, Brickman said.

SunTerra estimates the tests, including one to certify the wall system is water tight, will take eight weeks and cost about $14,500. But OSU’s Ideker said the rates have not been finalized and are still subject to approval by the University.

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Even for the most tuned-in green builders and designers, sourcing materials free of harmful chemicals can be a huge challenge.

While tools like , a materials rating system created by the , have produced more transparency than ever, unearthing manufacturers’ detailed product information is still an arduous, time-consuming task.

“Unfortunately, you can’t just Google it and find out what’s in something,” Google green team consultant Anne Less said last week during a session of the Living Future conference in Portland. “You can’t go to the (Environmental Protection Agency) for that information; it just isn’t anywhere.”

But determined companies, ambitious green building projects and recent policy initiatives are helping make it easier to know which chemicals are making their way into the built environment.

Google is abiding by the ‘s red list of forbidden chemicals for all of its building projects in North America, and is piloting the program for an international expansion. Through tenant improvement projects over the past two years, the Internet giant has made nearly half of its building portfolio red-list compliant, Less said.

But it hasn’t been easy. The red list includes substances extremely common in building materials, and many manufacturers are reluctant to share the chemical makeup of products. Researching and documenting one product can take up to 20 hours, according to Daniel Haas, preconstruction manager for .

“Google is a great, big, wonderful company,” Less said. “But we need a thousand Googles in order to make this really happen. We’re not enough.”

Project teams are starting to share more information and strategies to help reduce the time-consuming materials research. One such coalition was formed by Google’s green team, the Oregon Sustainability Center group, and developers working on Seattle’s Bullitt Center – a six-story Living Building Challenge project.

All of the groups found it extremely important to discuss materials early, use an intensely integrated process, and communicate directly with manufacturers. Haas said those strategies helped reduce research time to approximately two and a half hours per product during design of the Oregon Sustainability Center.

With more than 100 Living Building Challenge projects – some much larger in scale than earlier ones – under way, red-list proponents are focusing even more on ways to encourage transparency.

However, many manufacturers are reluctant to share proprietary information, others don’t want to publicize their use of potentially harmful chemicals, and still others simply do not know products’ exact chemical breakdowns.

Two new policies in Oregon are aiming to increase transparency and encourage more sustainable manufacturing practices. An executive order signed by Gov. John Kitzhaber last week requires state agencies to rework their purchasing guidelines for building materials, furniture and other products in favor of nontoxic substitutes.

The order also requires agencies to develop programs to promote Oregon’s “green chemistry” industry, which includes companies that design or manufacture chemicals, products or materials with fewer toxic chemicals.

Also last week, the city of Portland and Multnomah County unveiled a new “Healthy Purchasing Initiative.” Starting with a pilot program this summer, manufacturers of products purchased by the local government will be expected to reveal any hazardous chemical ingredients.

“It’s a logical place to start,” said Colin Price, research director for the Oregon Environmental Council, an organization that helped develop both policies. “We can’t do everything right now, but the intent behind these initiatives is to foster innovation.”

The policies may help manufacturers feel more invested in the green building movement, according to Priya Premchandran, a associate who worked on the materials team for the Oregon Sustainability Center. Dialogue between designers and manufacturers may progress if manufacturers feel like they have a role to play in the Living Building Challenge.

“We really need to make everyone feel invested,” she said. “The city and the county can start to create leverage so we can all make more informed decisions.”

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A group representing wood industry associations hopes that a new online calculator will show businesses benefits of using wood as a construction material, particularly on non-residential buildings.

, a cooperative venture of wood associations under the , launched two tools using RSMeans statistical data to compare cost and carbon impact of various construction materials. WoodWorks selected Oregon as a target state for its lobbying because it is a “wood-friendly area,” according to national director Dwight Yochim.

Yochim said his organization’s goal is to find demonstration projects in Oregon that use wood for shell construction on non-residential projects up to six stories tall. Then it will spread the message to less “wood-friendly” locations.

“On most projects, cost-effectiveness ranks right up there with code acceptance and safety on the list of priorities,” said Yochim. “By illustrating that wood has significant cost advantages for most building types, we hope the calculator will lead more design and building professionals to take advantage of wood’s other benefits, such as design flexibility, sustainability and low carbon footprint.”

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Contracting companies are facing a risky situation as their costs continue to rise faster than the prices they charge for new construction. Oregon firms are adjusting their business plans to suit the weak economy, but overhead fees are shrinking and could lead to trouble down the road – especially if those fees are artificially low, as one regional executive contends.

The latest figures from the Associated General Contractors of America, released earlier this week, indicate that contractors’ overall nonresidential construction costs – including materials, wages and overhead fees – have gone up 4 to 6 percent over the last couple of years. Bid prices are rising, but only by 2 to 3 percent this year – and on the heels of a year of dropping or stagnant prices, according to Ken Simonson, the association’s chief financial officer.

If contractors’ nonresidential construction costs continue to outpace earnings, many businesses may be in danger of shuttering.

“It’s a risky situation if contractors aren’t generating enough cash to replace equipment or cover overhead costs,” said Simonson, who noted that contractors nationwide are being forced to absorb construction price hikes because of weak demand.

The price index for new construction – what contractors charge for projects – is still being suppressed in the regional market, according to Steve Clem, vice president of preconstruction at‘s Oregon office.

The weak economy is making low overhead fees necessary, but Clem agrees with Simonson and said that large companies not making enough money to reinvest in technology and cover overhead costs could be forced to close local branches and that smaller shops could shut down altogether.

Making matters worse, according to Clem, major contracting companies are proposing unreasonably low overhead fees for negotiated contracts – those in which the contractor specifies a price for the client and avoids the bidding process.

“All of the big players in town have the same fee structures for general overhead … and the owner ends up paying for it one way or another,” he said.

Skanska‘s strategy is to educate its clients as to what “the real fee structures are,” Clem said. “When someone proposes a fee of 1.5 percent, there’s more to the story.”

Skanska, in contrast, is aiming for an incremental increase in fees – from 1.5 to 2.5 percent.

“It’s hard for owners to pass up a low fee on proposal day, but when everything is artificially low, (the owner) is making a decision based on a low price up front. But it’s quite possible that there are costs that will be included later that are not apparent to the owner when they first make their decision,” he said.

If contractors continue to underbid on negotiated projects, Clem contends that pent-up costs could lead to a spike in bid prices and fees when the market shifts and confidence increases. Until bid prices and fees rise, however, the pressure on company budgets will continue to mount.

“If the market is going to be so cutthroat that even in a collaborative method of project delivery people are being adversarial, it’s a negative for the entire construction community,” Clem said.

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Philomath School District officials say they were caught off guard by unexpectedly high construction bids on a $24 million high school renovation project.

High demand for labor at large projects and rising costs of materials made the project more expensive. As a result, the district had to scale down the renovation and completely cut other projects that it can no longer afford.

“Our budget was going to be tight anyway, but we thought the bidding would come in better than it has,” district business manager Kelly Howard said.

The problem facing the Philomath School District could affect others in Oregon if they begin projects unprepared for higher construction costs.

“We’re seeing easily 5 percent or 10 percent higher costs from what we saw a couple years ago,” said Rick Yeo, project manager at Cornerstone Management, which is involved in the Philomath project.

One of the major factors in the cost of construction is prices of materials and commodities like steel, masonry and glazing, said Jim Jerde, principal with .

“We’re seeing some price creep on (materials) that had gone down significantly,” Jerde said.

Yeo said that some material costs seem to have “bottomed out” and are heading back up.

Big projects like the one for Intel in Hillsboro or at Oregon State University have occupied subcontractors. With fewer subs bidding, prices are coming in higher, Howard said.

“Competition for subs has been tough, and (subs) are not as available to bid the K-12 work,” Howard said.

Jerde said it’s hard to tell exactly how big projects like Intel influence cost, but the main effect is timing.

“One big job always tips the scale because it takes big groups of people during specific time periods, whereas with a bunch of little jobs, the timing is spread out,” Jerde said.

The Philomath High School renovation is a multiphase project: A major renovation of the classroom wing was finished earlier this month, and Skanska USA, the construction manager-general contractor, is preparing to step into another yearlong phase to construct a new classroom building, administration area and gymnasium complex. Because a quick, phased schedule is being used, design and construction have sometimes overlapped.

“We had initial estimates, but as the architectural drawings get more defined and there’s more detail, the contractors have been able to have better, more accurate estimates,” Howard said. “Those estimates keep going up, and as costs start to creep, that throws the budget out of balance.”

The project team is preparing final drawings to bid for the next major construction phase in the coming weeks, Skanska project manager Trevor Wyckoff said.

To accommodate unexpectedly higher construction costs, the school district has had to scale back some of its expectations, Howard said. He said the district has had to decide whether to reduce project scope, increase the budget or reduce the quality of finishes.

“You have to make some choices,” Howard said. “Instead of using carpet, you do tile. Instead of using brick, you do concrete tilt-up. Some of the most expensive accents that are cosmetic have to go away.”

The district had hoped to have some extra money from the bond for projects such as a renovation of the press box at the football stadium, Howard said.

“Everybody has a wish list,” he said. “We’re just not going to have money available to do any of those extra things.”

Howard said the district prefers to reduce the scope of work rather than take money from operations, because school budgets are extremely tight. That conflict is true across multiple districts, Yeo said.

“If you’re not reducing the scope, you’re reducing programs or funding (construction) with money that the district doesn’t have (or) would like to use to buy textbooks and computers,” Yeo said.

Despite the cost creep, Yeo said the construction market favors owners, if they have money available.

“Costs are still 25 percent lower than they were five years ago,” he said. “It’s still a fabulous time to be building.”

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Construction materials prices are on their way up, albeit more slowly than initially anticipated.

According , construction materials prices rose modestly by 0.3 percent in July compared to a month previous and are 8.9 percent higher than they were one year ago. The statistics show that construction prices are rising, but not at the high rates that were expected a year ago.

“With the global economy slowing, industrial commodity prices are no longer rising so quickly and changes in materials prices over the next several months are likely to be modest in either direction,” said Anirban Basu, chief economist with the Associated Builders and Contractors. “Given the emergence of greater volatility in the markets and growing fear of another recession, the appetite for risk is on the wane, which is likely to translate into project delays and in turn will reduce the demand for construction materials.

“That should also help moderate materials price increases in the months ahead.”

The sector with the largest increase in prices include asphalt, tar roofing and siding supplies, which rose 2.4 percent in July and 4.8 percent over the last year. Moreover, nonferrous wire and cable prices increased 2.3 percent for the month and are 16.6 percent higher than the same time last year.

Conversely, total crude energy prices fell 2.6 percent in July as crude petroleum prices dropped 5.2 percent.

Both concrete and softwood lumber product prices remained relatively unchanged over the last month and the last year, while price for iron and steel, as well as steel mill products, increased 0.5 percent throughout July.

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