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Construction escalation forecast report and analysis for key U.S. locations and materials developed by Skanska USA Building's Project Planning Group.
Construction Market Trends
Q4 2021
01. Introduction
03. Forecast map
05. Construction/Labor
02. Pricing
06. Materials
07. Contact us
04. Supply chain
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Supply chain disruptions. Cost escalation. Logistics and transportation challenges. With so much volatility in the construction market, what’s in store for 2022? Join Skanska USA Building’s in-house experts to find out.
February 15, 2022 1:00 p.m. ET
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2021 was a historically disruptive year for the construction industry. Managing project budgets and schedules despite an unpredictable supply chain and rising costs required proactive planning and creative solutions. Let’s take a look at what 2022 has in store.
Top Considerations for the Upcoming Quarter
Turning the Page to 2022
Continue forecasting escalation above normal. Watch for relief in steel and steel derivatives pricing as 2022 moves ahead.
Continue accounting for unusually long lead times in project schedules, particularly on long lead products.
Monitor heightened COVID-19 pandemic levels and government regulations that could impact the supply chain.
Short term, we expect the supply chain of many key products to stay bottlenecked due to continued high demand in the distribution, data center, semiconductor and life sciences sectors; this remains further complicated by COVID-19 variant impacts. However, some key products have stabilized at longer lead times and others have begun to improve or are expected to improve as we get through the second quarter. We elaborate on these major trade areas in the supply chain section of our report.
To read the detailed remarks about supply chain challenges, download the full report.
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Consult with supply chain resources in the planning of projects. Stay connected!
Consider alternatives to specified products if lead time challenges are unavoidable.
Evaluate the lead times allowed for constrained products in all project schedules. Make adjustments to purchasing strategies.
The ENR BCI index showed a 14 percent inflation from September 2020 to August 2021. A more welcome sign was the annualized inflation rate of 3.65 percent from September 2021 to December 2021—this is close to the 30-year average of 3.4 percent. However, risk of abnormal inflation in 2022 remains. ENR’s January index showed a pace of .96 percent per month, nearly 12 percent annualized. We don’t believe this pace will continue, but we feel it is prudent to forecast in the four to eight percent range for the next 12 months (subject to local variables).
Q4 Construction Pricing Snapshot
12,482
Current Construction Industries Index
+0.1%
Change from previous quarter
Past one-year trend
Construction Index
$3.31
Current fuel price ($/gallon)
+4.2%
Fuel
$76.99
Current oil price ($/barrel)
+2.6%
Oil
$151.44
Current cement price ($ per CY)
+0.9%
Portland Cement
$1,837
Current standard plate price ($ per net ton)
+7.6%
Steel - Standard Plate
$1,092.46
Current plywood price ($ per MSF)
-4.3%
Plywood
$463.82
Current asphalt PG 58 ($ per ton)
+0.4%
Asphalt PG 58
Asphalt
Steel
Cement
Materials Index
Click an index or material to view details
+7.4%
Change from previous year
+15.1%
+32.3%
+118.7%
+3.1%
+58.7%
+50.7%
4,965
Current material price index
+0.6%
+31.0%
7,290
Building Cost Index
+1.0%
+13.1%
Source: Engineering News-Record
Source: U.S. Energy Information and Administration
Source: Bloomberg
Source: SteelBenchmarker
4,933
+11.2%
+37.6%
12,465
7,214
+2.9%
+4.9%
+8.4%
+14.5%
$3.18
Current Fuel price ($/gallon)
+0.5%
+45.4%
$75.03
+2.1%
+86.5%
$150.10
-0.3%
+1.5%
$1,707
+15.3%
+178.9%
$1,253.95
-5.1%
+64.5%
$453.61
+2.0%
+15.8%
More Material Insights
Forecasting Local 2021 Construction Costs Across the U.S.
Miami/Ft. Lauderdale
Seattle
Portland
Orlando
Tampa
New Jersey
New York
Boston
Phoenix
Philadelphia
Washington D.C.
North Carolina/ Virginia
Cincinnati
Atlanta
Nashville
Houston
Dallas
San Antonio
Los Angeles
San Francisco
Click on the map locations to see construction forecast details for a specific city or region.
Phoenix, AZ
From the billion dollar builds of the two largest microchip manufactures in the world, to hundreds of millions of dollars going into new builds for companies that will supply the chemicals and materials to support them—there appears to be no slowing of construction starts in Arizona. Inevitably, this is straining the material and labor markets.
Want to discuss the local market position and forecast? Connect with Andrew Rabasca, Regional Director of Preconstruction.
Early Onboarding Helps Mitigate Labor and Material Challenges
Cincinnati, OH
Despite inflationary pressure and supply chain uncertainty, there are currently no indicators that demand will slow in the short term. The strongest market sectors continue to be education, healthcare and multifamily residential. Life sciences and technology are also showing signs of growth in our region. This demand continues to put pressure on an already tight labor market. We are starting to see significant wage inflation which will continue the upward trend for overall construction pricing. Trade contractors are also being much more selective about the work that they pursue.
Want to discuss the local market position and forecast? Connect with Jeff Smoker, Vice President of Preconstruction in Ohio.
Construction Demand is Still Strong
Want to discuss the local market position and forecast? Connect with Chris Hillyer, Senior Vice President of Preconstruction in Texas.
San Antonio, TX
Tuition Revenue Bonds Fuel Higher Education Sector
In late fall, the Texas Senate approved $3 billion in Tuition Revenue Bonds, providing funding for many public Higher Education projects across the state and a much-needed boost to the sector. The residential market experienced a significant surge in 2021, including a push into downtown San Antonio. This growth is projected to continue in 2022 but at a much slower rate than the previous two years, as the market begins to stabilize. Skilled labor is still at a premium - especially on specialized trades. A recent report from AGC noted that 88 percent of contractors in Texas reported having unfilled craft positions, and 55 percent reported unfilled salaried positions.
Dallas, TX
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
Demands and Costs Remain High
Local Construction Cost Forecast
North Texas is still experiencing tremendous activity in all market sectors. In Higher Education, local universities and community colleges are continuing to expand their existing campuses. Other market sectors, such as mission critical, continue to provide opportunities as new projects are either in planning or construction phases. To accommodate the influx of people relocating to Texas, specifically North Texas, mixed-use and residential sectors are flourishing. As subcontractors fill up their backlog and the demand for quality craft workers increases, labor will become an issue.
Atlanta, GA
Material prices and lead times continue to increase monthly in Georgia. The latest challenge in the market has been roofing and polyISO insulation material shortages. A possible solution is alternative material selections to meet project schedule while maintaining the designed R value for the roof system. Additionally, the residential market is still going strong in Atlanta with no slow down on the horizon.
Want to discuss the local market position and forecast? Connect with Dane Wooley, Preconstruction Director in Atlanta.
Material Prices Increase, Lead Times Extend
Houston, TX
New and Ongoing Projects Increasing Demand
New and on-going construction projects are putting pressure on materials and labor, which are already strained by the pandemic. Unfortunately multiple hurricanes and unusual weather conditions have also further impacted supply chain productions.
Nashville, TN
Want to discuss the local market position and forecast? Connect with Adam Hicks, Vice President of Preconstruction in Nashville.
The East Bank: Nashville's Next Great Expansion
Los Angeles, CA
The Los Angeles market for 2022 will be similar to 2021 with rising construction costs and difficulty finding labor. The healthcare, aviation and higher education markets remain strong with many upcoming projects, both large and small. The commercial office sector has slightly slowed with the rising construction costs but rents have not followed. Additionally, developers are trying to understand how individuals will work in the future after many have worked remotely the last two years and what this means for office densities.
Want to discuss the local market position and forecast? Connect with Paul Hackett, Preconstruction Director in Los Angeles.
Los Angeles Market Remains Competitive
San Francisco, CA
Construction spending in Northern California has nearly recovered from pre-pandemic levels. Technology companies continue to build new space and healthcare is also experiencing a high level of demand. The general contractors and trade partners that specialize in these markets are busy. Design-build teams and teams experienced in lean management principles are in high demand. Some trade partners are turning away market opportunities because they lack the staff to support the management of projects. Many firms are working to hire additional team members to support future growth, especially for large-scale and complex project types. Many materials continue to face abnormal pricing and lead time pressure, and we expect to see the market address these challenges in the quarters ahead. We encourage early planning to help teams mitigate the risks of both labor and material costs.
Want to discuss the local market position and forecast? Connect with Mike Nelson, Preconstruction Director in San Francisco.
Northern California Market Remains Strong
Portland, OR
Supply chain volatility, rising construction costs along, and a strained labor market created significant challenges for the industry throughout 2021. Heading into 2022, there's growing sentiment that some balance will be restored by this summer. However, current ambiguity about vaccine mandates have employers and employees on edge. Some crafts project a 30 percent reduction in workforce if government regulations require mandatory vaccination, and that would significantly impact large, fast-paced projects. The need for hospital beds is driving healthcare customers to change programming for acuity-adaptable patient rooms that will give them more flexibility. Many contractors in the market are only limited by the availability of staff to run projects. It's reasonable to believe that projects initiated now could enjoy improved purchasing power by the time they are in the procurement phase. The Portland region is also quickly becoming a data center market and many projects are underway or planned for the future.
Want to discuss the local market position and forecast? Connect with Steve Clem, Regional Senior Vice President of Preconstruction in Portland.
Looking Ahead for Positive Changes
Seattle, WA
For 2022 we are continuing to see shortages in labor and material availability which will be reflected in higher bids for construction work. We are seeing more aggressive fees being proposed by major trades on work starting in mid-2023 and continuing into 2024. This is likely a result of several major, local projects reaching completion and firms looking to place a large labor force rather than an indication of a slowing market. We are still seeing a strong pipeline of project enquiries from many sectors, both public and private, which supports the view that there will not be a slowdown anytime soon.
Want to discuss the local market position and forecast? Connect with Alan Dunbar, Regional Senior Vice President of Preconstruction in Seattle.
A Fast-Growing Region Outpacing Others
Tampa, FL
As the number of new Florida residents continues rising, more demand on residential construction developments and the complementary service and distribution networks, is adding additional pressure to an already tight labor market. The Tampa metro-area is ranked high in housing growth with no end in the foreseeable future, we anticipate increasing construction costs in the foreseeable future.
Want to discuss the local market position and forecast? Connect with Jeff Courtney, Preconstruction Manager in Tampa.
Residential Construction Shows No Signs of Slowing, Contributing to a Tight Labor Market
Unemployment rates for construction are staying low. Demand for new residential housing and new commercial projects remains positive and is adding additional pressure to an already tight labor market. Infrastructure projects planned for release will add to labor shortages in 2022 and 2023.
Want to discuss the local market position and forecast? Connect with Jeff Courtney, Preconstruction Manager in South Florida.
Residential Demand Continues to Expand
North Carolina/Virginia
The NC/VA market continues to see a strong pipeline of projects into 2022 and beyond, keeping optimism and selectivity high among trade contractors. The region remains a top performer in its overall pandemic recovery, driven by population growth and strong research and technology industries. This increased pipeline continues to pressure construction labor availability despite the regional construction unemployment rate decreasing below pre-pandemic levels. This is impacting the majority of trades. In particular, electrical subcontractors are facing significant shortages of skilled labor due to large data center projects; this is driving down field productivity and increasing cost of supervision. While material price increases may be cooling, labor pressures are preventing any relief in final bid day pricing.
Want to discuss the local market position and forecast? Connect with Will Senner, Vice President of Preconstruction in North Carolina and Virginia.
Labor Shortages Continue While Strong Pipeline Drives the Market
Washington, D.C.
With D.C.'s population and suburbs growing, the residential sector remains the largest. Developers are looking at key locations to build new residential towers or re-purpose office buildings for residential use. Manufacturing and distribution centers continue to grow as they support the expansion of retailers like Amazon. Healthcare and Life Sciences continue moving forward with research and development opportunities and the education market is slowly coming back online. Federal/State and local school districts are evaluating and prioritizing modernization and renovation projects. Material pricing and lead times remain high but some are starting to stabilize. Key to mitigating risk is identifying materials early, evaluating alternatives where viable and working with manufacturers and vendors proactively to ensure timely procurement and delivery. Labor shortages remain a challenge; ensuring labor availability for upcoming projects will be key to success.
Want to discuss the local market position and forecast? Connect with Apryl Webb, Vice President of Preconstruction, Washington, D.C.
Washington D.C. Remains Steady
Philadelphia, PA
We are seeing an uptick in project opportunities with multiple RFP's due soon. The economy in our area (Philadelphia, Delaware and Southern NJ) is steady, and we are starting to see increased activity in Healthcare. Higher Education construction is slower to come back online as universities and colleges continue working through the virtual/in-person balance.
Want to discuss the local market position and forecast? Connect with James Lane, Vice President of Preconstruction in Philadelphia.
A Strong Start for 2022 With Hopes of Continued Activity
New York, NY
Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Metro New York/New Jersey.
Healthcare and Life Sciences Projects Continue to Fuel the Market
6 months - 1 year
1 - 2 years
Healthcare, Life Sciences and Higher Education markets continue to be robust and will keep New York contractors busy. Public agencies are considering design-build delivery methods more than they have in the past and the market will experience multiple opportunites this year. For successful outcomes in the preconstruction and construction phases, early engagement and transparency among all project stakeholders is essential.
Labor Pool Stressed by Busy Markets and Long Lead Times
Next 6 months
Infrastructure upgrades related to highways and bridges are keeping civil subcontractors incredibly busy, a trend that will continue for the next several years. Life sciences and higher education markets remain strong. New warehouses are in high demand, with schedule taking a front seat to cost. Lead times for structural steel and MEP equipment remain problematic. All project stakeholders should engage in open and honest discussions concerning higher than normal escalation for the next year and how to be proactive when procuring long lead time materials.
This map reflects local USA Building Project Planning Services team leaders’ opinions of market volume and capacity and is not based on published analytics or third-party forecasts.
Construction price inflation is/is expected to be above normal (3-5% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Connecticut
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction.
A Growing Backlog and Busy Market
Market is experiencing significant/abnormal construction price inflation (+5% per annum)
Boston/New England
Unprecedented growth continues in the Boston market, driven by pent-up demand from a year ago when the market was slow. Life Sciences, Higher Education, Corporate Commercial, Residential and Government work is driving this growth, with significant expansion in the Commercial Lab and Pharmaceutical Sectors. Many subcontractors are at or near capacity with good backlogs for 2022. Though material cost escalation has slowed, availability remains a major issue. Delivery times for items that are traditionally long lead have increased even further, some by as much as 100 percent. Transportation, logistics and labor challenges are also disrupting the certainty of delivery. We anticipate this pressure will continue well into 2022. Collaborating with local subcontractors and our national Strategic Supply Chain team will help ensure materials remain available for our projects.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Boston.
Continued Market Growth and Pressure on Labor and Materials
Click on the locations below to see construction forecast details for a specific city or region.
Miami/ Ft. Lauderdale
N. Carolina/ Virginia
Orlando, FL
Want to discuss the local market position and forecast? Connect with Brian Coakley, Director of Preconstruction in Orlando.
Construction Market Continues Trending Upward
We have seen backlog start to build for many subcontractors and construction managers. This has resulted in a slight price increase as firms are less likely to take work at reduced fees just to maintain volume. Though volatility remains in the cost of materials and their availability, for now, pricing is holding steady.
Higher education and healthcare institutions are releasing small/medium projects into the market for construction, and multiple, bigger projects are in the early stages of development. Miami Dade continues to be a destination for tech companies, and will drive development in the commercial market, activating other industries around technology.
The skilled labor shortage remains a problem in the Orlando Metropolitan Area. Steady improvement will hopefully continue in 2022, driven by Florida's supplement to federal unemployment benefits ending. The number of new commercial building permits issued by the City in 2021 was twice as high as 2020. This was a similar trend throughout the metro area. Due to Q4 travel restriction lifts (prior to Omicron), Orlando experienced a surge of tourists at theme parks, which translates to billions of dollars in theme park construction and maintenance opportunities through 2025. Residential and non-residential construction starts have jumped 18 percent from the start of the pandemic-driven construction slump. A report released by the University of Central Florida predicts there will be about 160,000 single family housing starts statewide in 2022, and the Orlando Metro Area can expect to receive about 25 percent. This indicates steady economic growth through 2024 at an average rate of 3.9 percent. An expanding economy and growing population means facilities like schools, hospitals, restaurants and retail will be in demand.
Want to discuss the local market position and forecast? Connect with Mark Lewis, Preconstruction Manager in Tampa.
The Nashville construction market remains strong, and forecasts from Cumming and ENR Southeast show steady construction for Multifamily Residential, Commercial, Industrial and Healthcare market sectors. The construction labor shortage is significant across Tennessee. ABC estimates that we are short 200,000 workers across the state, which further disrupts project schedules, costs and quality. It's expected that Nashville's "boom town" status will be maintained by public and private investment into the city's East Bank, which is home to Oracle's ongoing $1.2B investment, the Tennessee Titans/Nashville Sports Authority $600M investment, and a supporting private development that will be built within the 338 acres of land. The Nashville market is saturated with construction work, creating challenges for all involved in the industry and supply chain.
Contracting methods that support the earliest onboarding of General Contractors and key trade partners while allowing the design team to design out or early procurement of long lead or constrained materials (think: Integrated Project Delivery, Design-Build, Design Assist) provide the best path forward for timely procurement of materials and labor.
Supply Chain Trends and Insights
There are glimpses of a return to normalcy in some building material categories, while others continue to struggle or are affected by price escalation. In discussions with suppliers, we’re often hearing about workers returning to factories, allowing operations to return to full capacity. Suppliers are making investments in new production lines and increased automation to meet demand. As inventory improves, lead times are stabilizing and, even decreasing in some cases particularly for commodity materials. Looking ahead, we expect a decrease in lead times and pricing for many materials.
Status Key
Stable/Consistent
Trending Down
Fluctuating
Trending Up
Demand for roofing products remains very high. PolyISO insulation is still the biggest lead time challenge for roofing systems. However, MDI (a key raw material that goes into PolyISO) availability has recovered from petrochemical processing disruptions along the Gulf Coast. Lead times will stay in the 48-52 week range but should start recovering mid-year. With high demand for gypsum-based products, specialty roof insulation protection boards are experiencing extended lead times at around six months; price escalation is expected in the first quarter.
Lead Time
Price
Roofing Products
Structural steel has plateaued and hollow shape pricing is in decline. The largest concern with steel continues to be lead times for engineered bar joists. Though they recovered from a 48-week peak, down to 32 weeks, this is still longer than other steel elements. Additionally, joist pricing is still 300 percent higher than average. Strong demand from warehousing and data center markets continues to put pressure on this market. Substituting wide flange for bar joists has become a common solution, where feasible.
Structural Steel
Click for further analysis
Several architectural interiors material suppliers have announced SIGNIFICANT increases. Suppliers identified high levels of demand and inability to keep pace as the root cause. On January 24, USG increased suspension systems by 10 percent and ACT panels by 12 percent. Armstrong announced a 10 percent increase effective February 7 on most metal-based products, including suspension systems.
Ceilings, drywall, metal studs, flooring, paint, etc.
Architectural Interiors
After a dramatic fall, lumber prices are back on the rise due to intermittent operation of lumber mills limiting supply. In addition, the U.S. doubled tariffs (from 9 to 18 percent) on soft wood lumber from Canada. Pricing in Q4 was 120 percent higher than Q3.
Wood-based Building Materials
Raw material inputs for lab casework are starting to stabilize, with pricing for steel and resin receding. Lead times, however, continue to be extended around 26 weeks as backlogs remain very high. We do not anticipate lead times to continue to rise.
Lab Casework and Fume Hoods
Demand for appliances remains high while production is limited by the global semiconductor shortage and shipping challenges. Relief isn’t expected until Q3 2022 at best. Expect prices to rise at least three to five percent over the next 6-12 months.
Appliances
Prices and lead times were flat from Q3 to Q4. While there are supply chain component shortages in some areas, they are not materially affecting project schedules. Lead times are expected to improve in 2022 with typical price escalation of three to five percent annualized.
Elevators, Escalators, Moving Walks
Inventory for plumbing items is increasing as manufacturers’ lead times decrease. Manufacturers are generally increasing production through additional labor and new capacity with several making capital investments in plants and equipment. For example, Kohler announced a new one million square foot factory in Arizona. As supply improves, inventory of high-priced commodity items may be sold off by distributors and contractors. Prices are expected to stabilize and may lower in certain categories, like carbon steel pipe, in 2022.
Plumbing
While remaining high, lead times haven’t increased significantly since Q3. Manufacturers are improving productivity and capacity by increasing factory employee numbers and making capital equipment investments in factories. With component supply chain issues decreasing, some manufacturers forecast lead times will resume historical levels as early as Summer 2022. Manufacturers are implementing five to ten percent price increases in January 2022 and prices may rise 10 to 15 percent through the year. Demand should remain strong into 2023.
HVAC Equipment
While a global shortage of semiconductors is affecting several industries, the impact on building controls has been minimal due to mitigation efforts by controller manufacturers. Prices and lead time for materials are expected to increase moderately, however installation labor will continue to dominate price and lead time in this category.
Building Control Systems
Demand for UL1558 5kV and greater Switchgear and high voltage transformers is still very strong. All major manufacturers are booked for the next 45-52 weeks. Lead times for other product lines are stable and expected to decrease in the next six to twelve months as new capacity comes online. Manufacturers are investing in capacity increases and productivity is improving. Prices are expected to rise 10 to 15 percent on average through 2022.
Electrical Gear
Lead time for most commodity items has either stabilized or started to decline. Since Q3, distributors have overbought and increased inventory and are now generally well stocked. If supply chains improve in Q1 2022, distributors and contractors are likely to start reducing inventory levels to “trade” higher cost inventory for lower cost. Prices are expected to stabilize, then decline over the next 6 to 12 months.
Electrical Commodity Materials
Generator lead times have increased significantly since Q3 and delivery performance has declined. At least two major manufacturers are reporting major supply chain constraints, which increased lead times to 45 weeks across all product lines. Prices are expected to rise five to ten percent over the next 12 months.
Generators
Prices for domestic transportation were up 23 percent in 2021. Continued, strong consumer demand is keeping trucking capacity strained and transportation rates elevated. Other key factors driving escalation include rising wages and fuel costs. Forecasts indicate that no relief on pricing is expected until 2023. In Q3 it was reported that logistics managers’ biggest challenges were transportation prices and capacity. While there has been some leveling off for ocean freight, prices for domestic shipping remain high. Although the December LMI showed a decrease of 3.3 points for the month, the index remains above 70 for the eleventh month in a row. This shows that there is still significant expansion occurring although pace has slowed since peaking in the summer. The report also points to continued challenges in transportation capacity driven by driver and equipment shortages.
Transportation
Wood Products
Lumber pricing presented in the Supply Chain section of this report, reflects current pricing as it exits lumber mills in North America. This pricing has fallen dramatically. However, there is still higher priced inventory in the supply chain all the way through to wholesale and retail outlets. Plywood and lumber price declines at points of sale will continue to fall as inventory levels are burned off. Earlier in this report, we presented plywood price data that had not fallen off as dramatically, because it is measured at points of sale.
Steel pricing appears to be leveling off. In addition, there are some discussions starting around eliminating the Section 232 tariffs on imported steel. The Coalition of American Metal Manufacturers and Users (CAMMU) is urging the Biden Administration to eliminate the tariffs, stating that the U.S. has become an island of high-cost steel.
Drywall
Drywall pricing has escalated steeply over the last 9 months. However, the frequency of announced price increases from manufacturers has slowed in recent months. Residential building activity has slowed a bit since peaking in March but remains at a very high pace, keeping the pressure on manufacturers. Manufacturers continue to supply the market on “Allocation” or Controlled Distribution, which is stretching out lead times. Although pricing remains high, there is some evidence of stabilization but going forward will depend on housing activity. Additionally, insulation products have experienced extended lead times. This is most pronounced with mineral fiber insulation, which currently have lead times out beyond 200 days. Rockwool is opening a new facility in West Virginia this fall, which is expected to offer some relief towards the end of the year.
Petrochemicals in PVC
Petrochemical manufacturers in the Gulf Region account for 80 percent of U.S. production, and their products are primary ingredients for PVC. Over the past year, production has been disrupted by a series of complications ranging from explosions, Hurricane Laura, and most recently winter storm Uri. Ultimately, 80 percent of the petrochemical production in the U.S. was impacted. As a result, the lost production is estimated to reduce total output for 2021 by 10-12 percent. Production is ramping back up, but there are still some raw material constraints; however, most of the operational issues are expected to be mitigated by the end of April. Prices of PVC have increased rapidly as well, and large distributors have implemented price increases of around ten percent in February, followed by another five to ten percent increase in April.
Mechanical and HVAC Equipment
HVAC manufacturers are starting to see delays in the supply chain due to increased demand and workforce constraints in factories. In particular, Electronically Commutated Motor (ECM) fan manufacturers have extended lead times to 26 weeks; galvanized steel price and lead times have significantly increased; and flex conduit availability is becoming a concern.
Electrical Gear and Materials
Lead time for low voltage switchgear (less than 5kV) has extended to between 30 and 40 weeks. In some cases, capacity to generate submittals is further extending procurement lead times. Busway lead times range from 15 to 20 weeks and medium voltage switchgear lead times are between 18 and 24 weeks. Strong demand is expected to continue through the end of the year with further price increases expected because of rising manufacturing costs, including workforce constraints and rising cost of steel, aluminum and copper.
In mid-September there were a record number of 67 vessels waiting to be unloaded at the LA/Long Beach ports, which account for about 40 percent of all inbound volume from Asia to the U.S. Moving inland, lingering challenges remain: shortages of labor, trucks, chassis and rail equipment are amplifying the problem. Volume is up 18 percent in railroad intermodal units year over year. Problems persist and there has been no relief to shortages of labor. Fuel prices continue to remain elevated, and surcharges are continuing to be enforced. These issues are being experienced at ports globally, and project teams should continue to be aware of extended ship times when determining release dates. Categories to monitor include plumbing fixtures, lighting fixtures, escalators, moving walks and absorption chillers. In some cases, curtainwall and structural steel are impacted. If projects are sourcing glass or fans from Germany, be aware that extended ship times should be expected. Risks: China has implemented a zero-tolerance approach to COVID cases, as risk from the delta variant increases. This means that even a few cases can cause a whole port to be shut down. The second largest port in China went into lockdown for two weeks, and the shutdown created increased backlog in products. If drastic measures continue to be enforced, this could further reduce inventory levels and product availability downstream.
About Skanska's Strategic Supply Chain Team: Skanska’s Strategic Supply Chain Team leverages established relationships with major equipment and building material manufacturers to bring best value solutions to our projects and clients. Our direct relationships give us insight into the major supply chains feeding into the construction market. Since the outbreak of COVID-19, we have been working with our partners to closely monitor construction supply chain disruptions, lead times and impacts to market prices for materials and equipment.
To learn more about supply chain trends, reach out to Tom Park or Rob Cantando.
An example of this inflexion point is seen with structural steel. From Fall 2020 to July 2021, structural steel pricing increased over 120 percent. Between July and December 2021, price increases slowed to about 25 percent. The longest lead item, engineered bar joists, remains at 32-35 weeks.
Transportation and logistics are also starting to show signs of recovery. Dwell time–how long it takes for containers to be picked up by truck or rail after it has been off-loaded from cargo ships is down 48 percent from its peak in October 2021 but not fully recovered at the Port of Los Angeles. “Sweeper vessels” are clearing the empty containers clogging up U.S. ports to bring balance back to the ocean freight ecosystem. However, the number of ships waiting offshore to be unloaded remains high, indicating there is more work to be done. In addition, domestic transportation still faces driver and equipment shortages.
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Doors and Hardware
Elevators, escalators, moving walks
Building Control systems
Electrical commodity Materials
Lead Time and Price Snapshot
Click a category to view details
Trending Up Significantly
Logistics
Roofing
Roofing materials are typically procured as a complete package to be sure that all components are compatible and to allow roofing providers to warrant the total system. We have had some success with substituting certain materials to improve delivery dates, however, this takes a coordinated effort. It is important to work hand-in-hand with the roofing material supplier, the subcontractor, the design team and the owner. Some substitutions require design modifications. For example, replacing polyISO with polystyrene will typically result in the need for a thicker insulating panel to achieve the same R-Value.
The LMI has been slowly trending downward since it peaked in June 2021. However, the December reading of 70.1 remains just above 70, which indicates significant expansion. In addition to transportation, warehousing capacity is also constrained due to growing inventory levels.
Metal door pricing has escalated by 50 percent or more, and lead times have also extended. Typical metal door lead times of four to six weeks are now extended out 12 to 20 weeks. Door hardware has not been impacted as harshly. Lead times for door hardware now stand at six to eight weeks, slightly extended from the typical four to six weeks.
Copper prices have declined about ten percent from an all-time high in May of $4.90 per pound. This is caused by slowed growth in China’s economy, a stronger USD over the past two months, and rising COVID-19 cases globally. China also announced that it will sell 20,000 metric tons of copper at auction in early July in an attempt to help alleviate high prices. It is not likely that there will be long term relief on the price of copper. Top global copper producing nation, Chile’s, state-run mines were able to largely mitigate a planned strike in early June by increasing the wages of union workers. The wage increases, combined with a new bill being proposed by Chile to increase royalties on mining companies could keep the price elevated. In Peru, the second largest producer of copper, elections have caused uncertainty regarding copper prices. The presidential front runner has proposed royalties on copper sales in Peru, which could lead to additional price increases. The price of copper is currently expected to remain elevated throughout the year.
The Logistics Managers Index (LMI) tracks key metrics, such as transportation, warehousing and inventory data collected monthly from industry professionals. A value less than 50 indicates a contracting market and above 50 a growing market. The LMI has been slowly trending downward since it peaked in June 2021. However, the December reading of 70.1 remains just above 70, which indicates significant expansion. In addition to transportation, warehousing capacity is also constrained due to growing inventory levels.
Current Status:
6-12 Month Forecast:
Special considerations:
Drywall pricing continues to climb with Nat Gyp announcing an unspecified increase effective January 10. USG announced a 30 percent increase as well and a 50 percent increase on glass mat products effective January 3. Insulation products are also on the rise: Hunter reported a 12 percent increase effective February 1 on polyISO panels and Rockwool announced a 12 percent increase on mineral wool products beginning April 1. The most significant lead time extensions are with PolyISO, which remains in the 48-52 week range and glass mat products (sheathing and specialty wall board), which are on strict allocation with lead times starting at 60 days.
The key takeaway for August’s LMI of 73.8 is that transportation prices and utilization continue to grow. Peak transportation season is in full swing (with the holidays approaching), which adds pressure to a strained supply chain making relief early next year unlikely.
Roofing material lead times continue to extend. Roofing system deliveries can be as long as 10 months, depending on the materials specified. The toughest product to get is polyISO insulating panels. Lead times for polyISO are now greater than 10 months. In some cases, polystyrene insulation can be substituted for polyISO. However, many projects are taking advantage of this substitution and now polystyrene lead times can be as long as four to six months, depending on the source.
While steel shapes, such as wide flange members, are up significantly in price (75 to 130 percent depending on shape and dimensions), the largest impacts to steel pricing and lead times revolve around joists and decking materials. Because of the significant building activity in warehousing, distribution and data centers, joist lead times remain extended out beyond 40 weeks and decking is out to 25 weeks. In addition, joist and decking prices have increased 300 to 400 percent. In recent weeks, these lead times have started to ease and price increases are slowing.
Steel-based products, such as metal studs and acoustical ceiling suspension systems, continue to escalate. Armstrong has announced an additional increase of 10 percent on all suspension systems effective October 18, 2021. In addition, they are suggesting guidance of an additional five percent for any estimating out beyond February 1, 2022.
Lumber is one of the few bright spots in building material supply chains. Both dimensional lumber and panel pricing are down significantly. Dimensional lumber is down 72 percent from its peak in May and is now 24 percent below pricing seen in fall 2020, before the significant run-up in pricing began. Panel pricing is down 64 percent from the May peak and 14 percent below fall 2020 pricing. However, the free-fall in pricing appears to have ended and is now steadying at current levels.
Lab casework manufacturers are being impacted by two main inputs: steel and resins (for bench tops). Resin pricing has increased by over 300 percent and steel pricing has doubled. In addition, resin is in short supply and is leading to extended lead times. Overall, lab casework pricing is up 10 to 12 percent and lead times have been extended from 8 to 12 weeks, to 26 weeks.
Demand for appliances continues to be very high. Relief is not expected until Q2 2022 at best. Prices are expected to rise over the next 6 to 12 months by at least three to five percent. In addition to high demand, production is also being limited by the global semiconductor shortage and shipping challenges.
Prices are up slightly from Q2, however year over year, pricing for low-rise and mid-rise elevators are up significantly. Lead times are flat compared to Q2 but are up two to three weeks in each category, including escalators. Price and lead times are likely to increase further over the next six months.
Prices for copper, PVC, steel and stainless steel plumbing materials are expected to increase over the next six months as demand remains strong and supply chain issues persist. Price and lead time for plumbing fixtures holds the greatest risk over the next six months due to container ship transportation delays and premiums for ocean freight. Non-PPI pricing sources are reflecting higher YTD increase for pipe: up 101 percent for PVC, up 84 percent for carbon steel and up 67 percent for copper.
High demand, shortage of factory labor and supply chain constraints have led to significant lead time increases within the past three months across all HVAC equipment manufacturers. Reported lead times are between two and three time longer than typical lead times prior to the pandemic, while actual lead times being experienced by projects can be as much as four times longer. Air cooled chillers and full custom air handlers are experiencing the longest lead times in the range of 30 to 40 weeks. In order to mitigate risk of late deliveries, projects should add a minimum four week safety factor to all quoted lead times.
Pricing for all electrical equipment is up significantly since Q2, as a result of very large demand, reduced labor and increased input costs. Lead time for 600v to 5kV switchgear is also up significantly, now 44 to 52 weeks due to strong demand from data centers and warehousing projects. Busway and solid-state breakers are running 20 weeks and 40 weeks respectively.
Price and lead time for electrical commodity items are expected to increase over the next six months due to demand and supply chain constraints.
All major lighting manufacturers have announced price increases in the range of five to ten percent. Prices and lead times are expected to increase over the next six months as demand remains strong and shipping delays and costs increase.
Lighting
Of all the challenges that logistics managers are currently facing, transportation prices and capacity are the most difficult. Volume of shipments are up across the board as consumers in the U.S. continue to buy goods, and ocean carriers do not have enough capacity to meet consumer demand. Spot rates for shipping containers remain elevated and costs for ocean freight are almost 400 percent higher than last year. Prices to ship a container from China to the west coast of the U.S. soared to more than $20,000 per unit in August as the container dislocations continue to create difficulties. Pre-runup pricing was $3,800 per unit.
Hollow metal door pricing is continuing to be impacted by the escalation in steel pricing. Metal door pricing has escalated by 50 percent or more, and lead times have also extended. Typical metal door lead times of four to six weeks are now extended out to 12 weeks or more. The wood door supply chain is experiencing significant disruptions because of lack of available cores. Lead times for wood doors can be as long as 28 weeks. Door hardware has not been impacted as harshly. Lead times for door hardware now stand at six to eight weeks, slightly extended from the typical four to six weeks.
Lumber pricing is driven mainly by housing starts, which were on the decline the first couple of months this year. However, starts rebounded in March to 1.725 million, but have cooled slightly to 1.572 million in May. Overall, the housing market remains very strong and most housing market analysts predict strong starts through the remainder of 2021.
The Logistics Managers Index (LMI) tracks key metrics, such as transportation, warehousing and inventory data collected monthly from industry professionals. A value less than 50 indicates a contracting market and above 50 a growing market. The average through January 2020 was 63.15, with the LMI trending down. The average from February 2020 to present is 66.31, indicating strong expansion. June-August 2021 were the highest three months since inception, with an average of 74.4, largely driven by transportation growth. The key takeaway for August’s LMI of 73.8 is that transportation prices and utilization continue to grow. Peak transportation season is in full swing (with the holidays approaching), which adds pressure to a strained supply chain making relief early next year unlikely.
Metal studs continue to escalate with Super Stud announcing a 10 percent increase as of October 1, 2021. This brings total inflation on metal studs to 100–120 percent since Fall 2020. After a quiet period for drywall pricing, new increases have been announced by many manufacturers (including USG, CTD and Nat. Gyp.) of 20 percent, effective in October. Poly ISO and polystyrene insulation also continue to escalate. Hunter (polyISO producer) has announced a 10 percent increase, effective Jan. 1, 2022. In addition, Dupont has announced a 10 percent increase on their polystyrene products, effective Oct. 1, 2021. Lead times for Rockwool’s mineral wool product is now exceeding 200 days, leading them to announce that they will continue to acknowledge new orders but will not provide delivery dates.
As we end the third quarter of 2021, building material supply chains continue to struggle with a supply/demand imbalance. While residential demand remains very high, commercial construction demand is up significantly, led in large part by surging demand for data and distribution centers. On the supply side, manufacturers continue to be challenged by a number of headwinds, including labor shortages, raw material supply disruptions, ground transportation delays, ocean freight delays due to a shortage of workers at ports, and significant imbalance of shipping containers.
Products that are heavily dependent on raw petrochemical materials are experiencing one disruption after another. Plants that were still struggling to catch up after disruptions caused by Winter Storm Uri have now been hit with Hurricane Ida, taking significant portions of the supply chain offline.
We expect to see these raw material disruptions further impact key building material categories. In addition, the impact of transportation and shipping disruptions is being felt across a wide range of products. Below we take a deep dive into some of the key factors affecting transportation and introduce a new metric - Logistics Managers' Index (LMI) that we will be tracking to gauge the health of key logistical factors.
Labor is returning to factories, capacity is increasing, and inventories are returning to healthy levels—these point to an improving outlook for the next six to 12 months in many categories. An important factor to continue monitoring is the COVID-19 Omicron variant and its effect on labor and the supply chain. Though there will likely be rough roads ahead, we can expect lead time improvements and, with healthier inventories, an eventual decline in pricing. While improvements are expected, we will not see this across the board. Please see category details below for more detail.
What is LMI?
Prices for domestic transportation were up 23 percent in 2021. Continued, strong consumer demand is keeping trucking capacity strained and transportation rates elevated. Other key factors driving escalation include rising wages and fuel costs. Forecasts indicate that no relief on pricing is expected until 2023.
U.S. Construction Employment
Construction employment remains steady across the U.S., with the unemployment rate at five percent as of December 2021 according to the Bureau of Labor statistics. The number of construction employees is nearly the same as pre-pandemic (approximately 7.64 million in February 2020 compared to 7.56 million in December 2021). The industry has approximately 300,000 job openings, as firms hired 347,000 new employees but lost another 417,000 in November 2021. Average hourly wages ended at $33.57 in December 2021 as compared to $31.16 from December 2020.
Architecture Billings Index
Hover over the chart to see exact figures
This Architecture Billings Index (ABI) demonstrates whether or not architectural firms are billing for or signing new design contracts. The construction industry feels the impact of this index with a 9-to-12-month lag time.
The December ABI score of 52.0 indicates many firms ended the year on a high note. Firm billings in 2021 increased every month of the year except for January, as most firms experienced a strong rebound from the 2020 downturn. However, conditions are more variable by industry and region, with Northeast firms experiencing a fourth consecutive month of decline in billings and multifamily residential firms experiencing their first decline in nearly a year. While staff recruitment is a key concern for all firms, with one in five reporting existing staffing issues, backlogs remain near the highest levels ever reported since the AIA began collecting data in 2010.
-50 =50 50+
Decrease in volume
Increase in volume
Neutral
Scoring:
Skilled Labor Index and Common Labor Index
The ENR Skilled and Common Labor indices, both closed the year at annualized rates within range of typical figures. In 2021, the ENR BCI Index was up more than 13 percent and the skilled labor index was up 2.9 percent. Meanwhile, the material price index rose over 30 percent during that period. This reinforces the notion that the driving force of increased construction costs has been on the material side.
Construction Spending and Dodge Momentum Index
Total construction starts in December 2021 were flat with improvements in residential and nonresidential building coupled with a 12 percent decline in nonbuilding starts. However, total construction starts for all of 2021 rose by 12 percent compared to starts in 2020 with significant gains in commercial starts (up eight percent), institutional starts (five percent) and manufacturing starts (89 percent).
Construction, Architecture and Labor Indices
Spending
Employment
Labor
Source: U.S. Bureau of Labor Statistics
Source: U.S. Census Bureau and Dodge Data & Analytics
Architecture
Source: AIA
Click on the chart to see exact figures
Read the full ABI Report for December 2021 here.
The ENR Skilled and Common Labor indices, both closed the year at annualized rates within range of typical figures. In 2021, the ENR BCI Index was up more than 13 percent and the skilled labor index was up 2.9 percent. Meanwhile, the Material Price index rose over 30% during that period. This reinforces the notion that the driving force of increased construction costs has been on the material side.
Labor has not been driving construction cost escalation in 2021. Construction unemployment has returned to pre-pandemic levels, hitting a measured rate of 4.5 percent, according to the U.S. Bureau of Labor and Statistics. Average hourly wages rose from $32.16 in February 2021 to $33.25 in September, moderately higher than in traditional years at 4.5 percent in the past 12 months. However, it is estimated that there are nearly 300,000 unfilled construction jobs nationwide so while labor cost inflation is not the immediate concern, labor shortages and therefore production, is a concern.
September brought some stability to major cost indexes. However, regional markets are experiencing cost escalation at varying degrees, largely due to their area project pipelines. Nationwide, commercial construction spending still has a downward trend which is expected to taper and turn up in 2022. This could result in subcontractors passing on higher costs to GCs in all markets.
Construction, Architecture and Labor Indices
Construction Materials and Commodities Pricing
2021 was a year of sweeping material price increases, with steel, petrochemical byproducts, mechanical and electrical products and related commodities leading the way. Many products are 100 percent more costly than they were a year ago. This was driven by challenges in overseas manufacturing, unprecedented shipping and logistics issues, massive sector expansion in data centers, distribution, semiconductor and pharmaceutical construction, and disruption from major weather events.
Piping
Lumber and Wood
Metals
Oil, Gas and Fuel
Drywall, Gypsum and Insulation
Concrete and Cement
Steel and Aluminum
Pipe Producer Price Index
This chart shows a one-year trend of pipe producer price index. Polyvinyl Chloride (PVC) Pipe Average prices rose four percent in Q4, half the rate of the previous quarter. By year-end, prices were up nearly 100 percent. Copper Pipe Average prices were flat compared with Q3. Prices ended up 60 percent for the year. Carbon Steel Pipe Average price rose less than four percent since Q3. The overall price increase for 2021 was 65 percent.
In May 2018, gas prices hit a high of $2.90/gallon. They fell to a low of $1.87/gallon in May 2020 and have steadily climbed to an average price of $3.31/gallon. December saw the first decrease in gas prices in 12 months. The five-year average remains $2.62/gallon, which sets us 26 percent above average for the year ending. Looking forward, we anticipate that the rapid expansion of electric based equipment and vehicles will begin having a major impact on petroleum-based fuel products and ultimately the construction industry.
Aluminum With high demand meeting reduced supply from China, aluminum skyrocketed 62 percent in September. Market Insider reported cost at $2,818/ton in December 2021 and $2,031/ton in January 2022. Though the price has retreated, the year concluded with a 41 percent cost increase.
Zinc 2021 ended with zinc prices up 29 percent due to supply disruptions and strong demand. 2022 forecasts a slight decrease with supplies in surplus. No significant price increases are expected until 2023.
Nickel Prices continued to rise steadily with downstream demand strong in the stainless steel and battery markets. Nickel inventories are at their lowest levels in nearly two years.
Copper By Q4, wildly fluctuating prices had stabilized around $4.40/lb. 2022 outlook is stable with possible price relief from increased mine output. Chile and Peru, which produce over 35 percent of the world’s copper, may implement royalty taxes on future copper sales.
Lumber and Wood Products
A combination of factors is driving lumber pricing back up after bottoming out in Q3 of 2021. Most notably is a doubling of U.S. tariffs on softwood lumber from Canada, which increased from 9 to 18 percent on November 24.
This graph shows a one-year trend of key lumber and wood products in terms of producer price index.
Cement pricing has increased with growing demand at a relatively modest pace—less than one percent in 2020 and just over two percent in 2021. The challenge with cement has been logistics: getting materials from point of manufacture to batch plant and, finally, to the jobsite. In some markets these bottlenecks have led to cement being supplied on allocation. Project teams should coordinate ahead with ready-mix providers, especially for large pours.
Structural Steel Shapes and Rolled Bars
Structural steel pricing has plateaued and hollow shape pricing has started to decline. The largest concern continues to be lead times for engineered bar joists. Though lead times have dropped from a peak of 48 down to 32 weeks, this is still significantly longer than other steel elements.
Asphalt Product Pricing
Paving Asphalt PG 58 is a Performance Graded (PG) asphalt derived from specially selected crude oils via carefully controlled refining processes. Paving Asphalt PG 58 product is recommended for road construction. Asphalt WPU058102 represents the Producer Price Index of Asphalt and Other Petroleum and Coal Products reported by the U.S. Bureau of Labor Statistics.
Asphalt pricing is historically impacted by fuel pricing and seasonal regional conditions. In 2021, pricing climbed steadily upward. . This continues to be attributed to the current administration’s commitment to constraining U.S. oil production and the concern that OPEC nations will also restrict exports.
Gypsum, Drywall and Insulation
Drywall pricing continues to climb with Nat Gyp announcing an unspecified increase that began January 10. USG announced a 30 percent increase on drywall products as well as a 50 percent increase on glass mat products effective January 3. Insulation products are also on the rise: Hunter reported a 12 percent increase effective February 1 on polyISO panels and Rockwool announced a 12 percent increase on mineral wool products beginning April 1. The most significant lead time extensions are with PolyISO, which remains in the 48-52-week range, and glass mat products (sheathing and specialty wall board), which are on strict allocation with lead times starting at 60 days.
Click the icons to view interactive one-year index or pricing trends.
Though Q4 costs stabilized, they did not recede and have picked up pace again in many markets. In 2022, keep an eye on potential government pandemic regulations on business and manufacturing, imports and exports and the subsequent potential impacts that could affect commodity and raw material pricing.
This graph shows a one-year trend of key metals by price per pound (lb).
Source: U.S. Energy Information Administration
Source: U.S. Bureau of Labor Statistics PPI
Source: Engineering News-Record and U.S. Bureau of Labor Statistics PPI
Source: Kitco
Where some major cost indexes offer hope for stabilized pricing, the largest current risk is the supply chain’s ability to deliver products to jobsites in a manner that does not turn traditional 18-month builds into 24-month projects. Project teams are taking numerous measures to accelerate procurement of critical path materials, whose lead times have doubled or tripled, while also investigating alternative products that may mitigate schedule risk.
This chart shows a one-year trend of pipe producer price index. Polyvinyl Chloride (PVC) Pipe Average prices continue to rise, up eight percent since Hurricane Ida struck the Gulf Coast in August and up 48 percent year-to-date. Copper Pipe While raw copper costs have stabilized, the price of copper pipe continues to increase, up more than 32 percent since January 2021. Carbon Steel Pipe Average cost of carbon pipe is also up more than 60 percent year-to-date due to increased costs of raw material and transportation.
The average price of a gallon of gasoline is up $1.20 from September of 2020. While fuel costs are a contributor to onsite construction installation costs, their significance is much larger in the manufacture and transportation of raw and fabricated materials that are, in turn delivered and made part of buildings. The recent increases have been passed on to consumers by way of increased transportation and logistics costs. As costs of fuel and oil have risen, so have costs of other goods that make up the global economy.
Aluminum Price continues to remain elevated as demand is increasingly outpacing supply. The Outlook for 2022 is higher pricing and a supply deficit.
Zinc Prices spiked in October to a 14 year high due to concerns of supply shortages caused by high coal prices in China and production cuts in Europe. Though prices have come down slightly over the past week it is unlikely that there will be much relief.
Nickel Nickel prices continue to rise due to limited supplies as output from Russia and the Philippines declined and inventory levels have dropped. Prices will likely continue to rise as demand downstream is strong.
Copper Prices for copper surged in October partially driven by supply uncertainty surrounding production disruptions in Chile and Peru. Additionally the push towards sustainable energy is keeping demand for copper high. This trend is expected to continue, keeping copper pricing high in the long term.
While cement pricing has fluctuated, it has not been a root cause of construction inflation. The greater challenge in this space has been cement supply and its impact on concrete supply. Logistical challenges from point of manufacture to batch plant to jobsite have been hampering projects, causing construction teams to take extra care to plan concrete deliveries.
Steel pricing has continued to increase, however, pricing appears to be flattening. We do not expect pricing to fall in the short term, but we do expect pricing to stabilize near current levels. Lead times are also beginning to ease. For example, lead times for bar joists peaked at 52 weeks and are now receding to 40-45 weeks. In addition, decking lead times have eased to 20-25 weeks as steel coil is more readily available.
Asphalt pricing is creeping up primarily due to the increasing costs of petroleum. This appears to stem largely from the speculation that the current administration will constrain U.S. oil production and OPEC nations will restrict exports.
Gypsum-based product pricing has continued to escalate, with a 20 percent increase announced by major manufacturers in October. Lumber pricing, by contrast, has declined significantly and is now below levels seen in the Fall of 2020, before escalation began. Metal stud framing and ceiling suspension system pricing have continued to increase. Major manufacturers have announced recent price increases. Armstrong, for example, announced a 10 percent increase on their metal-based products, including suspension systems, effective October 18. It is anticipated that this will begin to slow as steel’s steady climb has started to plateau.
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