Volatility of Construction Materials in Q3
The previous two years have been a wild ride when it comes to the prices of construction materials. While some materials have fluctuated drastically, many others have steadily risen. With bottlenecks in the supply chain and rising gas prices, along with other untimely factors, the cost of securing necessary construction materials placed an added burden on every firm across the nation. These costs had to be, unfortunately, passed on to the consumer.
However, as pressure on the supply chain continues to dissipate, certain commodity prices have begun to improve. While the ongoing war in the Ukraine continues to pose challenges globally, gas prices have recently begun to trend downward, and that cost appears to be already reflected in the price of some domestic materials.
VOLATILE LUMBER PRICES
Lumber has been one of the most volatile of materials over the past two years. Since September of 2020, this commodity has drastically fluctuated, rising 40 percent over the second half of 2021 and now lowering 16 percent over the first half of 2022.
GLASS STOREFRONT SYSTEMS SURGING
While flat glass has somewhat stabilized nationwide, we have seen a staggering increase of 40 percent in the price of glass for storefront systems, here in the Southwest, over just the past quarter.
STEEL MILL PRODUCTS
Prices on steel mill products have dropped more than 14 percent since spiking in May as demand continues to wane. Experts point to the overproduction of steel in Q4 of 2021 as the reason for this drop in price.
FINAL DEMAND FOR GOODS
In the month of July, the index for final demand for goods fell by 1.8 percent, which is the largest drop since early 2020 when it fell 2.7 percent. Much of this decline can be attributed to a 16.7 percent drop in gasoline prices.