Cost of Construction Materials to Remain High
The good news for the construction industry is that the market is beginning to have some semblance of what it looked like prior to the pandemic. Most of the halted projects during 2020 have either been built or are in the process of construction right now. On the surface, it appears as if the construction industry has returned to normal, with the exception of one thing – cost.
RISING COSTS OF BUILDING MATERIALS
Across the board, the prices of building materials have increased – some much more than others. General contractors could only watch on as the price of materials rose nearly 20% in 2021. From this past November through March, we witnessed a massive increase of 10.6 percent in that short span.
THE CONSTRUCTION MATERIALS AFFECTED THE MOST
Inflation is a constant, no matter what industry you are in, but the unprecedented levels in the construction industry has general contractors rethinking not only how they source their materials, but how they build their projects. The cost of certain building materials has risen exponentially compared to others. Atop the list is steel pipe and tube, which has increased nearly 60% from one year ago. Copper and lumber aren’t very far behind at nearly 50 percent, with metal bar joists just over 40%.
OTHER ISSUES AFFECTING SOURCING FOR GENERAL CONTRACTORS
Just as signs of recovery from the pandemic began to show, another global issue took hold of the construction industry. The ongoing war in the Ukraine has created yet another hurdle for general contractors when it comes to the cost of building materials. The rising cost of fuel has translated to higher shipping costs and delivery delays. When you add in recent natural disasters and the various supply chain issues, the construction industry has seen a “perfect storm” when it comes to material costs.