During the past year the cost of materials needed to build a single-family home has escalated significantly. A July 2004 survey performed by the National Association of Home Builders (NAHB) estimates these increases at $5,000 to $7,000 per new home.

As the use of concrete has grown, cement shortages have surfaced in a number of states. However, concrete price increases account for a meager $283 (5.7 percent) of the $5,000 to $7,000 estimate. During the time period of the NAHB study, concrete prices had increased by 4.6 percent. Year-to-date the Producer Price Index from the Bureau of Labor Statistics reports an 8.4 increase.

Aside from concrete, building a home requires a multitude of other building materials including lumber, steel, gypsum, copper tubing, and plastic plumbing products. All of the materials have recorded double-digit annual increases compared to year-ago levels. These building materials, as well as other construction products, have contributed to the cost increase in single-family construction. Lumber price escalation accounts for more than half of NAHB’s estimated building material cost increase.

Concrete costs represent slightly more than 4% of estimated overall home construction costs and less than 2.5 percent of the price of a new home on the market estimated by the Bureau of Census at $274,200. Moreover, concrete has experienced a real price increase of 0.1% during the past four years when discounting for inflation.


Cement and Concrete
Although the terms cement and concrete often are used interchangeably, cement is actually an ingredient of concrete. Concrete is basically a mixture of aggregates and paste. The aggregates are sand and gravel or crushed stone; the paste is water and portland cement. Portland cement is not a brand name, but the generic term for the type of cement used in virtually all concrete, just as stainless is a type of steel.


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About PCA
Based in Skokie, Ill., the Portland Cement Association represents cement companies in the United States and Canada. It conducts market development, engineering, research, education, and public affairs programs.