Inflation and interest rates continued to normalize in the third quarter. The prices of many construction materials have stabilized, but concrete continued to increase. The cost of construction labor also continued to rise.
Material Input Costs | Ready-Mix Concrete
Concrete prices continued to march higher in the third quarter of 2023. The average price in Northeast Georgia for standard, 3,000 psi ready-mix concrete was $176.57 per cubic yard, a 3.8% quarter-over-quarter (QOQ) increase, and an 11.7% year-over-year (YOY) increase. Several suppliers also announced additional price escalations effective Q1 2024, ranging from $8.00 to $10.00 per cubic yard.
SOURCES: Ernst Concrete; Smyrna Ready Mix; Argos; Ready Mix USA
Construction Labor Costs
Construction labor costs continued to rise in the third quarter as strong demand for a shortage of skilled labor and broader economic inflationary pressures persisted. The Employment Cost Index (ECI) published by the U.S. Bureau of Labor Statistics reported a 4.58% YOY increase in construction industry wages and salaries during the period ending Q2 2023, and a 4.09% YOY increase in construction industry total compensation (including wages, salaries, and employer costs for employee benefits) during the same period. For perspective, since 2001, construction industry wages and salaries have increased, on average, only 2.64% per year and construction industry total compensation has increased, on average, only 2.69% annually. Unemployment also remained historically low. The U.S. unemployment rate (seasonally adjusted) was 3.8% in September 2023, 0.3% higher than a year ago but 1.0% lower than two years ago and 4.1% lower than three years ago. Georgia’s unemployment rate (seasonally adjusted) was only 3.3% in August. Unemployment in Atlanta and Gainesville was even lower: The unemployment rate (seasonally adjusted) for the Atlanta-Sandy Springs-Roswell Metropolitan Statistical Area (MSA) was 3.2% in August, while it was only 2.6% in the Gainesville MSA. As of August 2023, Georgia’s construction industry employed 223,700 people, which is 5% more than a year ago.
SOURCES: U.S. Bureau of Labor Statistics; FRED, Federal Reserve Bank of St. Louis; Georgia Department of Labor
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