Tuesday, September 1, 2009

Trend: Long-term prices are expected to increase as global competition increases

Continuing from the prior post on trends, that construction materials are decreasing in cost in the short-term.

China continues to acquire materials at increasing rates, accounting for 45% of world consumption in 2007. The rate of consumption grew 8.5% from 2006 to 2007. This type of competitive resource acquisition is expected to increase in additional sectors. By 2018, it is estimated that 80% of the world’s construction will take place in China and India.

Comments to the customer:

Prices for materials will increase in the long-term due to resource competition. This is a risk for both prices and procurement of US based construction materials. Recycling construction waste helps reduce costs as well eases the burden of materials acquisition.
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