Black Gold, Texas Tea
Friday, July 14, 2006
Rising gas prices have affected contractors across the country, which is not news to anyone. But the impact could be much greater than just spending more at the pump to fill up the company trucks. Because oil is used to make a wide variety of construction products, costs are going to go up. Oil is used in paint, plastics, asphalt, roofing materials and a host of other products you buy for your business. Many are predicting construction costs could rise anywhere from ten to fifteen percent. Instability and overall fears on crude oil costs could keep gas prices the same over the summer - or worse, they could continue to rise.
This could be tough news for what is considered to be the heart of the Remodeling and Construction season. This could affect many in the industry because the Federal Reserve continues to raise rates to stem inflation. Higher lending rates might prevent the average consumer from taking a loan for improvements or new construction. Also, the high cost of fuel dampens consumer spending behavior. For April 2006, retail sales were up only 0.5%, slower than expected. Economists say that, excluding gas sales, consumers didn't spend very much in April.
While March was a terrific month, spending on construction projects was at an all-time high, it could mean that belts will be tightening this summer. Keep this in mind when planning any spending increases for your business. Stay tuned to ConstructionDeal.com for new information on the economic trends that affect your company.
