Most contractors carry a cost book in their head or in a spreadsheet last touched a year ago. In a stable market that is fine. Construction has not had a stable market in some time.
Material costs move by category and by region, not uniformly. Lumber, steel, copper and PVC can each move in different directions in the same quarter. A blanket escalation percentage applied to an old cost book gets some lines right and others badly wrong.
What to refresh, and how often
- Commodity materials – lumber, steel, copper, fuel: check before every significant bid
- Manufactured goods – fixtures, equipment, doors: quarterly, or per quote
- Labor rates – annually, or when your agreement changes
- Regional factors – whenever you bid outside your usual radius
The second failure mode is geographic. National average pricing is an average of markets you are not building in. Labor rates alone can vary by a wide margin between metros in the same state.
This is the single most valuable thing an estimating partner brings: pricing adjusted to the project’s zip code on the day the bid is due, rather than a number that was true last year somewhere else.