Summer 2023 Construction Pricing Snapshot
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13,473
Current Construction Cost Index
8,227
Building Cost Index
+0.4%
1-Month change
+0.6%
1-Month change
Construction Cost Index
Source: Engineering News-Record
Data as of August 2023
6,083
Current material price index
+1.2%
1-Month change
Materials Index
Construction Cost Index
Spending
Building Cost Index
Materials Index
Labor
Architecture
Employment
Click an index or material to view details
Building Cost Index
Source: U.S. Bureau of Labor Statistics
All data as of June 2023
Hover over the chart to see exact figures
As of June 2023, the construction industry unemployment rate is 3.6 percent. Employment has increased by 198,000 jobs since June 2022, an overall increase of 2.6 percent. According to Associated Building and Contractors Chief Economist Anirban Basu, “Contractors have collectively added jobs in 15 of the past 16 months.”
U.S. Construction Employment
Source: U.S. Census Bureau and Dodge Data & Analytics
All data as of June 2023
Construction starts slipped 9 percent from June to July and are 5 percent below that of 2022. Much of this is attributable to nonresidential starts, which are down 24 percent in 2023. For nonresidential buildings, starts shrank 14 percent in June to $348 billion as manufacturing starts lost a whopping 67 percent. On a year-to-date basis, 2023 nonresidential starts were only 2 percent lower than 2022.
Construction Starts and Dodge Momentum Index
Source: Engineering News-Record
All data as of June 2023
Hover over the chart to see exact figures
Skilled Labor Index and Common Labor Index
Both the Skilled and Common labor indices had sharp growth from February through May, influencing the recent climb in the BCI and CCI. However, both labor indices have flattened the past two months which could signal that the BCI and CCI will follow as efforts to slow inflation impact construction volume.
Skilled Labor and Common Labor Indices
Source: AIA, All data as of June 2023
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.
As of June 2023, business conditions have essentially remained flat for architecture firms with an Architecture Billings Index score of 50.1. Backlogs have decreased to 6.8 months but remain healthy. Nearly all regions of the country report improving business conditions in June. However, firms with multifamily residential and commercial/industrial specialization continue to report softening figures (below 50).
June ABI Report
Architecture Billings Index
Fuels and Natural Gas
Structural Steel Inputs
Concrete and Cement
Drywall, Gypsum and Insulation
Asphalt
Lumber and Wood
Piping
Metals
Fuels and Natural Gas
Source: U.S. Energy Information Administration
All data as of July 2023
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index, Drywall and Insulation data as of July 2023, Gypsum data as of June 2023
Drywall, Gypsum and Insulation
Drywall
Gypsum
Insulation
Source: Steel Benchmarker
All data as of July 2023
Structural Steel Inputs
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
PG 58 data as of July 2023
WPU058102 data as of June 2023
Asphalt
Driven by the impact of OPEC modulation on oil production, oil pricing and downstream fuel costs have fluctuated this summer and while on average unleaded gas and diesel are flat or slightly down, some parts of the country have recently trended up.
$606.79
Current price
($/ton)
+3.7%
Change from previous quarter
260.799
Current index
+15.2%
Change from previous quarter
As the PPI index suggests, we anticipate pricing increases in the upcoming quarter based on infrastructure work and increases in the cost of petroleum products.
After a slight uptick in March and April, steel input pricing has receded from the previous quarter. Fabricated Wide flange shapes have flattened in price, while hollow shapes and plate are down slightly for the year (5-8 percent).
Source: Engineering News-Record
All data as of June 2023
Concrete and Cement
Cement and concrete markets have stabilized and availability has greatly improved compared to the last couple of years. However, supply challenges persist in regional markets, where construction activity remains elevated.
PVC: Resin prices continue to fall, translating into lower average PVC pipe prices.
Copper: Copper pipe prices remain lower than historic highs in 2021/22 based on continuous raw copper price declines over the past six months.
Steel: Overproduction of raw steel has resulted in lower steel pipe prices.
Source: U.S. Bureau of Labor and Statistics Producer Price Index
All data as of June 2023
Piping
Modest increases in the lumber market at the start of the year have settled. Lumber pricing continues to hold steady at pre-COVID levels. Continue to monitor housing start trends as a continued climb will impact lumber pricing.
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
Plywood and 2x4 S4S data as of July 2023
Lumber and Plywood data as of June 2023
Lumber and Wood
Nickel, zinc and aluminum pricing declines continued as inventory levels increased and demand remained down. Pricing of copper ticked up and is forecasted to rise due to anticipated demand for the metal and reduced production out of Chile, its number one producer.
Source: Kitco
All data as of July 2023
Metals
Scoring
-50: decrease in volume
=50: neutral
50+: increase in volume
Connect with us
353.0
Current index
-0.2%
Change from previous quarter
359.1
Current index
+1.3%
Change from previous quarter
382.1
Current index
+0.9%
Change from previous quarter
$10.32
Current price
($/sf)
-4.0%
Change from previous quarter
459.48
Current index
-0.9%
Change from previous quarter
$448.17
Current price
($/msf)
+12.6%
Change from previous quarter
$3.88
Current price
($/gallon)
-5.3%
Change from previous quarter
$3.60
Current price
($/gallon)
-0.01%
Change from previous quarter
$2.55
Current price
($/mmBTU)
+18.1%
Change from previous quarter
$1,554
Current price
($/net ton)
-4.5%
Change from previous quarter
$1,074
Current price
($/net ton)
-13.2%
Change from previous quarter
$863
Current price
($/net ton)
-21.5%
Change from previous quarter
The ENR Materials Index jumped in July, supporting the increase in the CCI and BCI indexes. However, this shift does not appear to track with reported price levels from other sources on Steel, Lumber and Cement. That said, the summer increases has the materials index on an annualized pace of +5 percent.
After being nearly flat for eight months, both ENR’s leading indicators, Construction Cost Index (CCI) and Building Cost Index (BCI), have moved up significantly, thus demonstrating a resiliency in the construction market despite price pressures already being felt by projects. Regardless of the summer jump, the BCI index is on an annualized pace of +4.7 percent which is slightly lower then our forecasted projections.
After being nearly flat for eight months, both ENR’s leading indicators, Construction Cost Index (CCI) and Building Cost Index (BCI), have moved up significantly, thus demonstrating a resiliency in the construction market despite price pressures already being felt by projects. Regardless of the summer jump, the CCI is on an annualized pace of +3.3 percent, which is slightly lower than our forecasted projections.
Scoring
-50: decrease in volume
=50: neutral
50+: increase in volume
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.
Availability and pricing of drywall, gypsum products and insulation continues to be stable. However, with a surprising jump in housing starts given elevated financing rates (1.6 million in the month of May—the highest level since April 2022), supply may start to tighten.
Natural Gas
Unleaded Gasoline
Diesel Fuel
Precast Concrete
Prestressed Concrete
Block and Brick
Hot-Rolled Band
Cold-Rolled Coil
Standard Plate
PG 58
WPU058102
173.496
Current index
-3.5%
Change from previous quarter
349.93
Current index
-7.4%
Change from previous quarter
199.514
Current index
-3.5%
Change from previous quarter
PVC
Copper
Carbon Steel
Plywood
2x4 S4S
Lumber and Plywood
263.7
Current index
-1.7%
Change from previous quarter
$915.06
Current price
($/msf)
+4.6%
Change from previous quarter
$1,040.07
Current price
($/msf)
+1.5%
Change from previous quarter
Aluminum
Zinc
Copper
$3.95
Current price
($/lb)
+1.8%
Change from previous quarter
$1.16
Current price
($/lb)
-3%
Change from previous quarter
$1.00
Current price
($/lb)
-13.5%
Change from previous quarter
Nickel
$10.00
Current price
($/lb)
-8.7%
Change from previous quarter
Download Report
+2.2%
6-Month change
+2.3%
1-Year change
+17.6%
3-Year change
+2.8%
6-Month change
+3.4%
1-Year change
+31.2%
3-Year change
+3.4%
6-Month change
+2.8%
1-Year change
+71.8%
3-Year change
Market Sentiment
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Data as of August 2023
Data as of August 2023
Data as of July 2023
Data as of June 2023
Data as of July 2023
Data as of July 2023
Data as of June 2023
Data as of July 2023
Data as of June 2023
Data as of July 2023
Source: Engineering News-Record
Data as of August 2023
Source: Engineering News-Record
Data as of August 2023
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Forecasting Local 2023 Construction Costs
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.
Click the map pins to see forecast details for a specific city or region.
Miami/Ft. Lauderdale
Seattle
Portland
Orlando
Tampa
New Jersey
New York
Boston
Connecticut
Phoenix
Philadelphia
Washington D.C.
North Carolina/
Virginia
Cincinnati
Atlanta
Nashville
Houston
Dallas
San Antonio
Los Angeles
San Francisco
Boston/New England
In Boston, a backlog of large projects continues to pressure subcontractor capacity through 2024. Subcontractors are being selective in bidding projects instead of the traditional increasing markups. Pricing for MEP trades is seeing unprecedented increases, driving costs up 75 percent post-pandemic and commodity pricing continues to increase at rates above inflation. Additionally, increased lead times are still negatively impacting projects. Some trades have started to flatten and are helping drive inflation back down but not enough to get to normal levels overall. Private multi-unit development projects are still slowing due to ongoing interest rate hikes. Life sciences, healthcare and manufacturing projects are moving forward aggressively, mitigating the decrease in new office construction starts.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Boston.
Markets Still Showing Summer Heat
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Next: Supply Chain
Back: Pricing
Market is experiencing significant construction price inflation (+5% per annum)
Market is stable and construction pricing/ inflation is less than 3% per annum
Market is recessed and construction pricing/inflation is flat or negative
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant construction price inflation (+5% per annum)
Market is experiencing significant construction price inflation (+5% per annum)
Market is stable and construction pricing/ inflation is less than 3% per annum
Market is stable and construction pricing/ inflation is less than 3% per annum
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Back to map
Connect with us
Atlanta, GA
With several large data center and manufacturing facility projects—all with large electrical subcontracts—going to contract this year in Atlanta, other upcoming projects in the area will be strained. Lead times for electrical components have not improved, and there is additional pressure on elecrical contractors in this area as a large, long-time union electrical contractor recently closed its doors unexpectedly. Local GCs are looking to offset these challenges by bringing in large electrical firms from surrounding states.
Electrical Equipment Lead Times and Labor Concerns Continue
Want to discuss the local market position and forecast? Connect with Dane Wooley, Preconstruction Director in Atlanta.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Cincinnati, OH
In Cincinnati, it appears we are heading into a more predictable escalation curve as cost escalation is flattening with only residual escalation remaining, which is related to wage increases. Trade partner competition is currently strong as immediate short duration projects are being sought to fill a slight dip in construction until next year’s strong backlog starts. Small and fast start projects will benefit from this competition, but as larger projects get started in the first quarter of next year, we will once again see a strain on the market.
Slower Fourth Quarter Predicted but Backlog Still Strong for 2024
Want to discuss the local market position and forecast? Connect with Jeff Smoker, Vice President of Preconstruction in Cincinnati.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Dallas, TX
While recession warnings continued throughout the first half of 2023, the North Texas market continually observed steady growth, as well as future planned projects, in all market sectors. In healthcare, Children's Health and University of Texas Southwestern has a new 532-bed, $2.5 billion hospital breaking ground in 2024. JPS Health Network plans to build a new ambulatory surgical center as a part of an overall $1.5 billion expansion in Fort Worth. The mixed-use market sector remains hot with notable projects in the pipeline, including the Collin Creek Mall Redevelopment, a phased $1 billion pedestrian-friendly project on 99 acres, and the Newpark-A Smart District, a $3.5 billion multiphase project on a 2-acre site. In the higher education market, Texas A&M Fort Worth has a $4.2 billion five-year capital plan that includes $2.7 billion of projects already in design. A couple of large public projects have been approved including the DFW Airport Terminal C Improvement budget of $4.5 billion and TxS Life Sciences District, a $3.6 billion, 200-acre life sciences development in Plano, which will consist of 4,000,000-SF of lab, office, and therapeutic production space.
North Texas Remains Solid in All Sectors
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Washington, D.C.
The D.C. Metro area sees owners pausing projects in some sectors until market conditions improve. Multifamily and healthcare sectors are primarily affected, but even some higher education projects are pausing. The K-12 market remains down slightly but is steady with select projects still moving forward. The supply chain for electrical gear, large generators and HVAC equipment is still strained. Long lead times and continued cost escalation do not appear to be changing any time soon for these items. Labor remains tight and continues to rise at a normal rate. However, developers are seeing buying opportunities for distressed properties, which could turn into construction projects in 2025 and beyond.
Some Sectors Pausing Until Conditions Improve
Want to discuss the local market position and forecast? Connect with Tom Strawbridge, Preconstruction Director in Washington, D.C.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Houston, TX
According to the C.T. Bauer College of Business, there is no recession in the outlook for Houston, just a period of slow growth for the rest of 2023. In healthcare, TMC Helix, a 5,000,000-SF multiphase project with a budget of $2.5 billion continues onward. Other healthcare projects are in the planning stages, including Harris Health LBJ replacement hospital budgeted at $1.6 billion and the University of Texas MD Anderson $668 million laboratory expansion consisting of 600,000-SF feet in the Medical Center. Other notable upcoming projects that are approved with funding secured include the Hobby Airport seven gate expansion with a budget of $450 million and DeisoMoss Tower, a mixed-used, 43-story tower. Although Houston remains active and strong with the number of construction projects ongoing and in the pipeline, we are beginning to see subcontractors pricing more aggressively to secure backlog for 2024.
Slow Growth but No Recession
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Construction price inflation is expected to be above normal (3-5% per annum)
Los Angeles, CA
The well-documented struggles of commercial office demand, due largely to the relative stall in the return-to-office movement, have all but snuffed out development in that sector. The market is optimistically embracing the increased focus on infrastructure development and a greater emphasis on sustainability and green building practices. Market trends, including adaptive reuse, technology adoption, and demand for mixed-use developments, will continue to shape the industry and gain more focus. While commodities pricing may continue to fluctuate, firms will need to remain vigilant in managing costs as a more stable supply chain emerges. The ongoing skilled labor shortage will require innovative solutions and workforce development initiatives to meet project demands efficiently.
Challenges Persist, but There are Bright Spots
Want to discuss the local market position and forecast? Connect with Darrell Torres, Senior Preconstruction Director in Los Angeles.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Miami/Ft. Lauderdale
In South Florida, material price stability continues for rebar, metal cladding and plumbing piping, and price has even fallen slightly for light gauge metal framing. However, price of concrete ready mix, tile, insulation and glass continues to escalate. Lead times remain elevated for mechanical and electrical equipment. Additionally, unemployment remains low based on the strong labor market, and trade partners continue to be selective in projects they pursue.
Material Escalation Sways and Trade Partners Remain Selective
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Nashville, TN
Nashville's construction scene remains steady and poised for continued growth in the coming years. Investments by national and international corporations, development firms, institutions, public entities and partnerships sustain a high volume of construction activity for Nashville and middle Tennessee. Many projects see growing timelines as design and preconstruction phases push construction start dates. Continued growth has left its impact in other ways such as in the region’s ability to receive and manage construction waste as well as in provisions for temporary electric utility service to power major equipment, such as tower cranes. Nashville and middle Tennessee remain a hot market and will continue experiencing localized escalation and workforce limitations.
Construction Steady and Poised for Continued Growth
Want to discuss the local market position and forecast? Connect with Adam Hicks, Vice President of Preconstruction in Nashville.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
North Carolina/Virginia
Local trade partners are staying busy and selective in their bidding. While developer work has slowed, the overall pipeline of private projects has remained strong enough to cause some trade contractors to pass on public work entirely. The backlog of large corporate projects—from manufacturing to life science to corporate commercial—continues to be a major draw on resources. Despite this pressure, we are starting to see initial signs of more aggressive bid day results. This is still limited to certain trades, with MEP in particular, seeing more inflated pricing. Overall, the rate of local construction inflation has decreased, and is expected to continue decreasing into next year, before stabilizing at more traditional levels. However, a period of decreasing costs is still not anticipated based on the volume of local work.
Steady Pricing Despite Future Uncertainty
Want to discuss the local market position and forecast? Connect with Will Senner, Vice President of Preconstruction in North Carolina and Virginia.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
New Jersey
Starting in July, New Jersey will limit new construction projects in inland flood-prone areas. Developers and designers must now include stormwater management provisions to account for extreme rainfall projections and future sea level rise. New Jersey Department of Environmental Protection anticipates sea level rise could exceed two feet by 2050 and over five feet by the turn of the century. Under this guidance, grade level floors must now be two feet higher than currently shown on state flood maps and three feet higher on FEMA maps.
Five to ten percent of all buildable sites in New Jersey will be influenced by this mandate. Despite this recent direction, planning and construction across most major markets continues to thrive. Healthcare, higher education and state-funded infrastructure upgrades are keeping contractors busy and pricing competitive. Lead times are still problematic for large mechanical and electrical equipment, fan coil units, cold-formed metal framing and elevator controllers, but other building materials have started to normalize to near pre-pandemic levels.
New Rules for Construction in New Jersey’s Inland Flood-prone Areas
Want to discuss the local market position and forecast? Connect with Nick Culver, Vice President of Preconstruction in New Jersey.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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New York, NY
Healthcare in New York continues running at a very busy pace as new RFPs and project starts are the best in the last three years. Mt. Sinai, NYU Langone Health and Northwell Health, three of New York’s largest healthcare providers, continue to expand existing facilities while adding new locations and exploring new options. Conversion of office and retail spaces to Medical spaces has picked up this year. The life sciences sector is also strong with more projects coming online for the remainder of 2023. Additionally, the cultural market sector is a bright spot with a substantial number of new projects out for RFP. Overall, market conditions and supply chain issues still exist, but there is noticeable easing of both materials costs and lead times across all sectors.
Healthcare Still Running Strong
Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction in New York.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Orlando, FL
The employment rate for Orlando continues to be low for the ninth consecutive month, with a year over year average less than 3 percent. Labor shortage has fueled the competition for qualified craft throughout Central Florida, driving wages higher. Trade partners continue to be selective in projects they pursue, with reports of backlogs full through the end of 2023. Continued escalation in construction costs and increased finance costs have caused some owners to put plans on hold, but this has yet to affect the marketplace. However, we anticipate more competition towards the end of 2023 when backlogs begin to dry up.
Historic Low Unemployment and Strong Backlogs Continue Upward Price Pressure
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Philadelphia, PA
The healthcare market in Philadelphia and South Jersey continues to gain momentum with several new RFPs hitting recently. Life sciences continues to be strong, not only with new lab opportunities, but with new capital projects and office renovations as clients realize the importance of new amenity space to bring staff back to work. Higher education continues to be slow coming back as online learning has changed the thought for college and universities in our market. However, a number of new higher education projects are being contemplated and we expect opportunities to pick up in this sector later this year and in 2024.
Healthcare and Life Sciences Continue to Gain Momentum
Want to discuss the local market position and forecast? Connect with James Lane, Vice President of Preconstruction in Philadelphia.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Phoenix, AZ
The Phoenix market, and Arizona overall, is still extremely busy as it moves forward on mega projects. However, some market sectors are slowing construction starts due to increasing construction costs, which are being driven primarily by quantity of skilled labor availability. Additionally, there has been some delays on project start dates due to extremely high labor and materials demand. The datacenter market continues to grow and expand due to the availibility of land and power resources.
Still a Hot Market (Even for Phoenix in the Summer)
Want to discuss the local market position and forecast? Connect with Tom Feeney, Vice President of Preconstruction in Phoenix.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Portland, OR
The Portland metro market pipeline has slowed considerably and competition is picking up. Projects are seeing more proposals and tighter margins. Trade partners are being selective and conservative as they typically do not project backlog our as far as construction managers. Major infrastructure projects—city bridge, interstate bridge and water treatment facility—will consume adjacent resources and may buoy the overall construction market. As a result, prices are steady but not falling. The opening of the Ritz Carlton in August will be a good temperature check on the health of the city's recovery from challenges of the last three years.
Metro Market Pipeline has Slowed and Competition is Picking Up
Want to discuss the local market position and forecast? Connect with Steve Clem, Senior Vice President of Preconstruction in Portland.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation 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)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
San Antonio, TX
Bexar County, where San Antonio is located, and its adjacent counties comprised one of the top ten growing regions in the U.S. last year, according to the U.S. Census. The market will remain busy supporting this growth with public and bond projects, including the mega $2 billion airport master plan currently out for CMaR solicitation. The five-year forecast for San Antonio’s downtown area already comprises nearly 60 projects, worth over $3 billion in construction, including infrastructure, hospitality, residential and mixed-use projects. However, in the near term, the slowdown in development projects will continue as financing costs and interest rates remain elevated.
Continued Downtown Growth Keeps the Market Busy
Want to discuss the local market position and forecast? Connect with Chris Hillyer, Senior Vice President of Preconstruction in San Antonio.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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San Francisco, CA
The vacancy rate for commercial office space in downtown San Francisco is currently over 30 percent—one of the highest in the country—and is driven by the reluctance of tech workers to commute, as well as the ongoing social economic issues the city is facing. Despite the impact to office space, this strong remote workforce continues to drive the demand for cloud storage, thus new data centers, and neighborhood healthcare facilities. Pricing pressures continue to rise due to the availability of materials and equipment. However, lead times for equipment appear to be easing.
Office Vacancy Rate over 30 Percent
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Seattle, WA
With cruise season back to pre-pandemic levels, much needed tourism has returned to the Seattle downtown area, re-energizing the retail, hospitality and aviation sectors. This helps offset the tempered starts of new downtown residential and commercial office projects impacted by the high cost and limited availability of financing and the continued struggle of enticing the workforce back to the office. Additionally, local elections in the fall will bring current social-economic challenges to the forefront. Outside of the downtown core, there continues to be plenty of opportunities for new projects, most notably in K-12, mass transit and aviation sectors. New labor agreements and the ongoing shortage of labor, as well as availability of materials and equipment, continue pushing prices up, but more aggressive margins and reduction in costs of lumber and shipping are helping keep them in check.
Welcoming Back Tourism
Want to discuss the local market position and forecast? Connect with Alan Dunbar, Senior Vice President of Preconstruction in Seattle.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Tampa, FL
The Tampa construction market remains one of the strongest in the country. Large healthcare projects, schools and office/retail spaces on top of the single & multi-family housing boom in Pasco and Hernando counties, have strained the capacity of skilled workers in all trades. With new many new construction projects starting in these sectors, we further anticipate challenges with local material supplies. Experienced teams should engage in continuous and ongoing discussions with trade partners and specifying engineers about long lead items; particularly chillers, AHUs, pumps, fans, generators, transformers and panelboards, while also investigating alternate materials, where feasible, for contingency planning. Teams need to consider early release packages—site, structure, envelope and MEP—to mitigate these challenges while still delivering projects in timeframes that meet customer expectations.
Construction Market Remains Strong, Resource Challenges Persist
Want to discuss the local market position and forecast? Connect with Jeff Courtney, Preconstruction Manager in Tampa.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation 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)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
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Connecticut
According to the Connecticut State Department of Labor, 2022 saw less than one percent construction growth and 2023 looks similar. Competition is tight as public and private education projects increase. Healthcare and multi-family residential market sectors have healthy pipelines, but private money has slowed due to rising interest rates and market uncertainty. Subcontractors are still protecting their margins, so pricing has not yet started to drop. Additionally, long lead times continue to hamper productivity, causing pressure on pricing for some quoted materials. However, roofing is an outlier as material availability improvement has caused pricing to drop. A return to normal escalation is anticipated over the next few months to a year, with slight potential to be lower than normal.
Construction Growth Low
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Boston.
Local Construction Cost Forecast
Next 6 months
6 months - 1 year
1 - 2 years
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Back to map
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Download Report
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Want to discuss the local market position and forecast? Connect with Alan Dunbar, Senior Vice President of Preconstruction in Seattle.
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation 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)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation 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)
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation 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)
Market is experiencing significant construction price inflation (+5% per annum)
Market is experiencing significant construction price inflation (+5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Design Sentiment
Don’t miss the new design sentiment section to see what our leaders had to say about the industry’s top concerns.
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation 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)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Want to discuss the local market position and forecast? Connect with Tom Stickrod, Vice President of Preconstruction in Orlando.
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Construction price inflation is expected to be above normal (3-5% per annum)
Market is recessed and construction pricing/inflation is flat or negative
Market is experiencing significant/ abnormal construction price inflation (+5% per annum)
Market Sentiment
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Want to discuss the local market position and forecast? Connect with Walt Chislak, Preconstruction Manager in South Florida.
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Supply Chain Trends and Insights
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About Skanska's Strategic Supply Chain (SSC) Team: Skanska’s SSC 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.
Over the past three months, the construction supply chain has continued to improve, most notably around raw material prices for PVC resins, steel, copper and lumber. These improvements are due, in part, to the reduced residential demand and increased capacity as the supply chain normalizes back to pre-pandemic conditions. Roofing, structural steel, architectural interior, plumbing, electrical commodity and wood-based products are all seeing lead times come back to normal levels and prices stabilizing, albeit at escalated levels. Barring any disruptions, price and lead times are forecasted to remain stable in these categories over the next 6-12 months.
As discussed in the Spring report, HVAC and electrical gear supply chain challenges continue due to component, labor, and equipment capacity shortfalls. However, several major HVAC equipment manufacturers have reported significant improvement in their backlog of orders due to increased factory capacity resulting from investment in new facilities, new equipment and the hiring of additional workers. Based on these improvements, and lower raw material costs, HVAC equipment lead times have likely peaked and will continue to come down for the remainder of 2023. Prices are on track to increase 10-15 percent for 2023 but may return to a more normal annual increase of 3-5 percent starting in 2024.
From an electrical equipment perspective, the electrification trend and continued data center investment discussed in our Spring report will likely last for several more years. Even though most manufacturers are investing hundreds of millions of dollars in new plants and supply chain capacity, the persistent strong demand will only moderately reduce lead times over the next 12 months.
Discover more
Contact Tom
Vice President of Strategic Supply Chain
Tom Park
Contact Robert
Director of Strategic Supply Chain
Robert Cantando
Logistics
Electrical Gear
Roofing Products
Structural Steel
Architectural Interiors
Doors and Hardware
Lab Casework and Fume Hoods
Appliances
Elevators, escalators, moving walks
Transportation
Plumbing and Fixtures
HVAC Equipment
Building Control systems
Electrical commodity Materials
Generators
High Purity Process PVF
Current Lead Time and Price Forecast
Lead times described are after fully approved submittals and factory accepted release
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Status Key
Stable/Consistent
Trending Down
Fluctuating
Trending Up
Trending Up Significantly
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The Logistics Managers Index (LMI) tracks key metrics—such as transportation, warehousing and inventory data —and is collected monthly from industry professionals. A value of less than 50 indicates a contracting market and above 50 indicates a growing market. The LMI for December was 54.6. This is up slightly from November’s reading, which indicates that growth is increasing.
Logistics
Roofing supply chains have fully recovered. Lead times for most items are in the 1-3 week range depending on quantities needed. Manufacturers have produced inventory and the seasonally strong roofing market should be on solid footing.
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Roofing Products
Click for further analysis
After falling for six months after its peak in June of 2022, structural steel pricing has stabilized, and pricing in June 2023 is flat to slightly down in comparison to May 2023. However, the scrap market continues to be tight and may lead to increases in the coming months.
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Structural Steel
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As a result of the cooling housing market, availability of interior products has improved and is generally within historical lead times. However, with housing starts jumping 22 percent from April to May of this year, we will closely monitor housing starts and the materials markets for any resultant changes. Additionally, the rising rolled steel costs reported last quarter have reversed course and should provide relief to pricing of metal studs.
Ceilings, drywall, metal studs, flooring, paint, etc.
Architectural Interiors
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Lumber pricing continues to hold steady at pre-COVID levels. However, with the unexpected housing starts jumping 22 percent from April to May, we will closely monitor housing starts as they are the primary driver of lumber pricing.
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Wood-based Building Materials
Click for further analysis
Lab casework lead times are holding steady at the standard range of 8-12 weeks. After some notable escalation in sheet steel pricing during the first quarter, pricing has fallen as underlying demand no longer supports continued escalation.
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Lab Casework and Fume Hoods
Appliance supply chains have improved and some distributors are even sitting on inventory, but this varies by manufacturer and appliance type. For planning purposes, lead times should be assumed in the two to three-month range.
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Appliances
Average lead times remained unchanged over the last quarter but will likely improve over the next 6-12 months as commercial projects ease. General pricing is on track to rise 3-5 percent this year as a result of material and labor cost increases. Lead times for elevators vary depending on the category and manufacturer:
• Low-rise elevators range from 14-24 weeks
• Mid-rise elevators range from 20-27 weeks
• High-rise elevators range from 40-48 weeks
• Escalators range from 12-20 weeks
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Elevators, Escalators, Moving Walks
Inventory continues to be healthy for most materials, allowing orders to be filled within a few days. However, lead times for certain larger diameter ductile iron pipe are still running 16-20 weeks. In the past three months, we’ve seen significantly fewer manufacturer price increases and have even noted a few select price decreases. The average sales price of PVC and copper pipe has been flat over the past 6 months. Steel pipe has steadily declined over the past three months and is down 5-7 percent compared to Q1 2023 as commodity prices and freight costs have also decreased. Over the next 12 months, fixture prices are expected to increase by 7-10 percent with an announcement likely in Q1 2024.
Lead Time
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Read More
Plumbing and Fixtures
While HVAC demand continues to be strong, there is evidence that lead times have already peaked, or will, in the next 3-6 months. Some categories—RTUs, AHUs, DOAS, and WSHP—are already seeing a reduction in lead times as manufacturers work through backlogs. However, chillers are the one exception as lead times are still 45-65 weeks due to continued supply chain challenges and high demand from data center projects. Price increases remain at 10-15 percent for 2023, but we believe there is a chance for more normal 3-5 percent annual increases as early as 2024.
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HVAC Equipment
Click for further analysis
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.
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Building Control Systems
Electrical gear lead times continued to increase over the past three months and are not expected to decrease in the next 12 months. Even with investment in additional capacity through 2023, manufacturers have pushed out delivery commitments for some products, citing high demand and supply chain issues as primary causes.
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Electrical Gear
Click for further analysis
Lead times for most commodity electrical items are down as manufacturers have stabilized their supply chains. Contractors and stocking distributors are actively reducing inventory levels as a result of high interest rates and lower demand, both current and forecasted. Lead times may temporarily increase in the future if manufacturers reduce capacity. Prices are still expected to increase 3-5 percent due to inflation of material cost and labor.
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Electrical Commodity Materials
Lead times for generators of all sizes are running 45-75 weeks as manufacturers are still experiencing high demand for all genset sizes. Long lead times are primarily due to component supply chain constraints, such as wire harnesses and semiconductor chips for controls. Data center demand shows no sign of slowing for the next few years as clients are ordering for 2025 delivery and beyond. Price increases are expected in the range of 5-10 percent in 2024.
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Generators
Based on slowing consumer demand and resolution of congestion at U.S. ports, shipping container activity will fully recover to “normal” levels in 2023 and container costs are now at pre-pandemic levels.
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Price
Transportation
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Door hardware and hollow metal door lead times continue to hold in the 7-10 week range. We continue to recommend close monitoring of electronic access control materials as some semiconductor supply issues linger.
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Doors and Hardware
Due to strong demand in life sciences, healthcare and the semiconductor markets, pricing and lead times continue to increase. While it varies depending on the material/equipment, the trend is still moving up across the board. Lead times for A269 SMLS Tube is running 24-26 weeks from the mills.
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High Purity Process Pipe, Valves and Fittings (PVF)
Click for further analysis
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.
Kez Gneiting
National Supply Chain Manager
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Wood-based Building Materials
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Key
Continue early release procurement of mechanical and electrical equipment packages
Obtain confirmed factory releases in writing from manufacturers
Follow up regularly with manufacturers to confirm deliveries
Top planning considerations:
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Top planning considerations
Continue early release procurement of mechanical and electrical equipment packages
Obtain confirmed factory releases in writing from manufacturers
Follow up regularly with manufacturers to confirm deliveries
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Over the past three months, the construction supply chain has continued to improve—most notably around raw material prices for PVC resins, steel, copper and lumber—due to reduced residential demand and increased capacity as the supply chain normalizes back to pre-pandemic conditions. Roofing, structural steel, architectural interior, plumbing, electrical commodity and wood-based products all see lead times coming back to normal levels and prices stabilizing, albeit at escalated levels. Barring any disruptions, price and lead times are forecasted to remain stable in these categories over the next 6-12 months.
As discussed in the Spring report, HVAC and electrical gear supply chain challenges continue due to component, labor, and equipment capacity shortfalls. However, several major HVAC equipment manufacturers have reported significant improvement in backlog based on investment in new facilities, new equipment and the hiring of additional workers to increase factory capacity. With these improvements and lower raw material costs, HVAC equipment lead times have likely peaked and will decrease for the remainder of 2023. Prices are on track to increase 10-15 percent for 2023 but may return to a more normal annual increase of 3-5 percent starting in 2024.
From an electrical equipment perspective, the electrification trend and continued data center investment discussed in our Spring report will likely last for several more years. Even though most manufacturers are investing hundreds of millions of dollars in capacity, the persistent strong demand will only moderately reduce lead times over the next 12 months.
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Top planning considerations
Continue early release procurement of mechanical and electrical equipment packages
Obtain confirmed factory releases in writing from manufacturers
Follow up regularly with manufacturers to confirm deliveries
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About Skanska's Strategic Supply Chain (SSC) Team: Skanska’s SSC 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.
Electrification is the primary means currently being pursued to eliminate the burning of fossil fuels and resultant carbon emissions. As the U.S. moves towards a future of nearly-zero emissions by 2050, the demand for electrical infrastructure will continue and even accelerate. Obviously, this process will subsequently create huge demand for the electrical equipment required to move power around the grid and channel it to both residential and commercial spaces.
We are highlighting this concern to point out that long lead times for electrical equipment are here to stay. In order for project teams, design teams and owners to maintain desired project timelines, our recommendation continues to be early release of electrical equipment.
At the present time, electrical power used in commercial buildings centers around lighting, air conditioning, refrigeration and a small portion of space heating. As we convert furnaces, water heaters, cooking appliances and clothes dryers from gas and oil to electricity, power requirements will increase significantly. Add to this framework, the goal of having two out of three new cars and light trucks sold in the U.S. electrically powered by 2032, and you start to understand why The New York Times recently reported that total electricity demand in the U.S. may double by 2050.
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Vice President of Strategic Supply Chain
Tom Park
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Director of Strategic Supply Chain
Robert Cantando
Transportation
Logistics
Electrical Gear
Roofing Products
Structural Steel
Architectural Interiors
Doors and Hardware
Lab Casework and Fume Hoods
Appliances
Elevators, escalators, moving walks
Wood-based Building Materials
Plumbing and Fixtures
HVAC Equipment
Building Control systems
Electrical commodity Materials
Generators
High Purity Process PVF
Lead Time and Price Snapshot
Lead times described are after fully approved submittals and factory accepted release
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The Logistics Managers Index (LMI) tracks key metrics—such as transportation, warehousing and inventory data —and is collected monthly from industry professionals. A value of less than 50 indicates a contracting market and above 50 indicates a growing market. The LMI for December was 54.6. This is up slightly from November’s reading, which indicates that growth is increasing.
Logistics
Roofing supply chains have recovered. Many roofing system components that have been problematic have now stabilized. Polyiso insulation lead times now average three weeks or less, down from their 52-week peak. Most membranes are running at two to three weeks and cover board is averaging four weeks, down from 22 weeks. One category to watch is fasteners. Fasteners of certain lengths still have extended lead times.
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Roofing Products
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After falling for six months after its peak in June of 2022, structural steel pricing is now rising. Hollow sections are up 10 percent and plate is up 11 percent. Wide flange remained flat through March but is expected to rise in April. Price drivers include a resurgent automotive sector, low levels of imported steel and rising scrap costs.
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Structural Steel
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The availability of interior products has improved across the board and lead times are down significantly—even glass-mat gypsum products are readily available. Pricing levels have also generally receded. However, pricing for rolled steel is climbing. As a result, steel stud manufacturers have announced increases, with some being two separate increases of ten percent each in the first quarter of 2023.
Ceilings, drywall, metal studs, flooring, paint, etc.
Architectural Interiors
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Lumber pricing continues to hold steady at pre-COVID levels. Housing starts were reported at 1.4 million (annualized) in February, which is essentially flat compared to starts reported for the end of 2022.
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Wood-based Building Materials
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Lab casework lead times are holding steady at the standard range of 8-12 weeks. Input material pricing is escalating (steel) and causing upward pressure on pricing to the market.
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Lab Casework and Fume Hoods
We are getting mixed reports regarding supply chain stability from different manufacturers. Some experience continued challenges from component suppliers and resulting lead-time extensions. Others report stabilizing supply chains and improved lead times in the two to three-month range. We expect more widespread improvements as housing demand continues to cool during 2023.
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Appliances
Material supply chains have generally improved slightly over the last quarter, but factory labor is still a challenge. Overall, lead times will likely come down over the next 6-12 months as demand from commercial projects eases. Prices are still expected to rise three to five percent this year as material and labor cost increases get passed on. Lead times for elevators vary considerably depending on the category:
• Low-rise elevators range from 14-24 weeks
• Mid-rise elevators range from 20-27 weeks
• High-rise elevators range from 40-48 weeks
• Escalators range from 12-20 weeks
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Elevators, Escalators, Moving Walks
While lead times have come down over the past three months, prices for pipe, valves, fittings and fixtures have become variable, depending on the specific category. The average sales price of PVC and steel pipe has steadily declined over the past three months, as commodity prices and freight costs have also declined. However, recent increases in steel costs may start to push those other material prices up moderately in Q1 2023. The average price of copper has decreased from its high in June but remained stable over the past three months, with prices expected to rise again. Regarding valves, fittings and fixtures, approximately 100 manufacturers have announced price increases in January 2023 that range from six to eight percent. Over the next 6-12 months, prices are expected to increase by 5-10 percent.
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Plumbing and Fixtures
HVAC demand continues to be driven by strong demand for new construction and HVAC upgrades in both the public and private sectors. With the HVAC equipment market being heavily fragmented by a large number of manufacturers using proprietary designs, lead times can range from 10-12 weeks up to 65+ weeks. Air-cooled chillers and certain centrifugal chillers are running 45-65 weeks. RTU lead times have a very large range based on tonnage and air handlers can range from 10 to 65 weeks based on specifications. Generally, material lead times are improving. However, this is being offset by strong backlog and a shortage of factory labor resulting from the tight labor market. Some lead times including VFDs have improved, but ECM motor lead times have not and are still running 50-80 weeks.
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HVAC Equipment
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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.
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Building Control Systems
Electrical gear continues to be the longest lead time material for most commercial construction projects. Lead times are specific to the type of equipment and manufacturer. However, switchgear from most manufacturers is being quoting at 70-80 weeks. Some are even quoting 100+ weeks for large transformers and double-ended substations. Other equipment, such as panel boards, busway and transformers are being quoted at 10-40 weeks depending on specifications. These lead times do not include the time for submittal approval. Demand from data center projects continues, as well as K-12, Higher Education, Healthcare and Automotive. Data Centers are the primary reason for increased lead times which is compounded by the general electrification trend to meet carbon reduction goals. The supply and demand imbalance, as well as commodity and labor costs, is predicted to push prices up over the next 6-12 months.
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Electrical Gear
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Lead times for most commodity electrical items are down as manufacturers have stabilized their supply chains. However, medium voltage cable lead times are still in the 30-45 week range. Prices for copper have bottomed out as COMEX copper prices have increased. Wire is expected to rise 5-10 percent over the next 6-12 months. However, aluminum wire is expected to stay relatively flat.
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Electrical Commodity Materials
Order intake for generators among the major manufacturers continues to run three to four times the historical rates. Demand is coming from all sectors, but data center demand continues to be extraordinary. The supply chain is still challenging. For example, even when the generator can be delivered on time, custom sound enclosure fabrication may become the constraint based on the lack of industry capacity for this level of demand. Material and labor cost inflation will drive significant price increases this year. The 2MW gensets are now exceeding 100 weeks. Forecasts indicate that the need for data centers will increase over the next three to four years. Gensets in the range of 230kW to 2MWs are running 65-75 weeks due to broad demand from many industries. Prices continue to rise at an annual rate of 15-20 percent due to material, labor and overall demand.
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Generators
Shipping container prices continue to decline as consumer demand continues to shift away from goods. Congestion has eased as capacity continues to be added. Rates for routes from Asia to the U.S. West Coast are around $1,000 for 40’ containers, which is near pre-pandemic pricing.
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Transportation
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Door hardware and hollow metal door lead times continue to hold in the 7-10 week range. The most challenging materials continue to be on the electronic access side. The availability of semiconductors is driving lead times of these products and we recommend allowing 30 weeks lead time. Improvement is expected in the third and fourth quarters of 2023.
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Doors and Hardware
Due to strong demand in life sciences, healthcare and the semiconductor markets, pricing and lead times continue to increase. While it varies depending on the material/equipment, the trend is still moving up across the board. Lead times for A269 SMLS Tube is running 24-26 weeks from the mills.
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High Purity Process Pipe, Valves and Fittings (PVF)
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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.
Kez Gneiting
National Supply Chain Manager
Contact Kez
Connect with us
Download Report
So, what does this mean for electrical gear? As we have pointed out in prior Market Trends reports, electrical equipment providers are already stretched to capacity. Lead times for electrical gear are in excess of 80 weeks (about a year and half) today. Many manufacturers are expanding capacity, but we have not yet seen a positive impact on lead times.
Electrical equipment providers are stretched to capacity: lead times for electrical gear are in excess of 80 weeks.
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