Moderate materials price increases predicted for '98.

Materials prices are expected to rise by just 1.6%, largely due to increased worldwide competition and reduced construction activity. Global competition decreases capacity restraints, requiring producers to keep prices down. Slower construction activity levels generate sluggish demand, which also exerts downward pressures on prices.

Since the 1990-91 recession, residential and nonresidential construction markets have experienced six years of consecutive growth. Typically, such high levels of activity lead to sharp increases in building materials costs. However, in the last two