Industry analysts and contractors say the construction industry will continue to experience rising material prices during the next couple of years, according to constructiondive.com.
Michael Hardman, vice president of global real estate and infrastructure consultancy Turner & Townsend, said the forecast for year-over-year price escalation in 2022 remains between 9% to 12%. Inflation in the U.S. is expected to further exacerbate the issue.
Constructiondive.com offers the following outlooks from industry analysts and contractors regarding construction material categories.
- Cement and concrete: Cement and concrete prices have continued to climb, in part because of higher production costs, which were up about 14% year-over-year during the third quarter of 2022. Prices are expected to remain close to current highs as production and transportation costs persist and shortages continue.
- Steel and lumber: Steel prices fell significantly from their high points during the third quarter, with national prices down about 12%. Weakening demand also could contribute to a price decline. After soaring in 2021, lumber prices currently are at pre-COVID-19 levels because of oversupply and a housing development slowdown and are expected to continue to decline.
- Insulation material: Polyisocyanurate insulation has been especially difficult to obtain during the past couple of years after winter storm Uri in 2021 disrupted the supply chain of methylene diphenyl diisocyanate, one of the raw materials used in polyisocyanurate insulation. COVID-19 and transportation issues added to supply issues and price hikes. Pricing recently has begun to stabilize as supply has improved, though some expect future price increases because of increased raw material and transportation costs.
