Fall 2023 Construction Pricing Snapshot
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Materials and Commodities
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13,498
Current Construction Cost Index
8,256
Building Cost Index
+0.09%
1-Month change
+0.2%
1-Month change
Construction Cost Index
Source: Engineering News-Record
Data as of October 2023
6,125
Current material price index
+0.3%
1-Month change
Materials Index
Construction Cost Index
Spending
Building Cost Index
Materials Index
U.S. Employment
Architecture
Unemployment
Click an index or material to view details
Building Cost Index
Source: U.S. Bureau of Labor Statistics
All data as of September 2023
Hover over the chart to see exact figures
U.S. construction unemployment remains steady at 3.8 percent as of September 2023. The industry has added approximately 129,000 jobs since the start of the year. However, since May, job openings have started to decrease, moving from 416,000 to 350,000.
According to the U.S. Bureau of Labor Statistics, the unemployment rate remained unchanged at 3.8 percent in September 2023. Nonfarm payroll (i.e., the number of workers in the U.S. except those in farming, private households, proprietors, non-profit employees and active military) employment rose by 336,000, nearly double the number Wall Street economists expected. Job gains occurred primarily in leisure and hospitality, government and healthcare.
U.S. Unmployment
Source: U.S. Census Bureau and Dodge Data & Analytics
Construction spending data for August 2023 and Dodge Momentum data is from September 2023
Year-to-date through September, total construction starts—nonresidential, nonbuilding and residential—are down 6 percent. Nonresidential starts are down 7 percent and residential starts are down 17 percent. However, nonbuilding starts are up 25 percent. According to Chief Economist Richard Branch, “Risks continue to mount for the construction sector...a return to broad-based growth in construction starts is still some time away."
Construction Starts and Dodge Momentum Index
Source: Engineering News-Record
All data as of October 2023
Hover over the chart to see exact figures
Skilled Labor Index and Common Labor Index
In Q1 and Q2, the Skilled and Common labor indices had sharp growth, influencing the climb in the BCI and CCI indices we saw in the first half of 2023. However, both labor indices have flattened the past 4 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 September 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.
The AIA Architecture Billings Index (ABI) score of 44.8 for the month is the lowest since December 2020—indicating a deterioration in business conditions at architecture firms in September. All regions of the country, as well as the commercial/industrial sectors, have seen a softening of the ABI. With a score of 44.0, multifamily residential is significantly dragging the overall ABI score, however, the institutional sector has upside potential at 50.2. In addition, the ABI reports, “the value of newly signed design contracts also slumped, indicating there is increasing reluctance among clients to sign contracts committing to new projects."
September 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 October 2023
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index, Drywall and Insulation data as of October 2023, Gypsum data as of September 2023
Drywall, Gypsum and Insulation
Drywall
Gypsum
Insulation
Source: Steel Benchmarker
All data as of October 2023
Structural Steel Inputs
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
PG 58 data as of October 2023
WPU058102 data as of September 2023
Asphalt
Historically, as we shift into the cooler fall season, we expect fuel pricing to decline. However, with increased oil prices and supply cuts from Saudi Arabia, fuel prices have been higher in recent months. As the U.S. increases production, we anticipate pricing to stabilize and even mildly recede in the months ahead.
$613.08
Current price
($/ton)
+1.0%
Change from previous quarter
256.58
Current index
-1.6%
Change from previous quarter
Asphalt pricing, which often follows fuel trends, has remained stable for the past quarter from an index perspective. Local, actual costs may deviate based on project demands.
Structural steel pricing continues to flatten and trend downward. Wide flange remains flat, while hollow shapes and plates are down slightly (1-2 percent).
Source: Engineering News-Record
All data as of September 2023
Concrete and Cement
Cement and concrete markets remain stable with improvement in availability compared to the last couple of years. However, there are still some occasional, local challenges with supply in markets with mega projects. We recommend close coordination with ready-mix providers.
PVC: The steady decline of domestic resin prices since July is resulting in lower PVC pipe prices.
Copper: Raw copper prices are stable to down, but lower demand for pipe is putting pressure on prices.
Steel: The automotive strike is lowering demand, causing steel prices to fall.
Source: U.S. Bureau of Labor and Statistics Producer Price Index
All data as of September 2023
Piping
Lumber pricing remains flat at pre-COVID levels. As housing starts have cooled further to an annualized rate of 1.28 million in August (11.3 percent below July), we expect lumber pricing to hold steady.
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
Plywood and 2x4 S4S data as of October 2023
Lumber and Plywood data as of September 2023
Lumber and Wood
Nickel, zinc, copper and aluminum pricing declines have continued as demand has remained low. Despite the downward trend of commodity pricing, declines in pricing have halted due to supply concerns and forecasted deficits.
Source: Kitco
All data as of October 2023
Metals
Scoring
-50: decrease in volume
=50: neutral
50+: increase in volume
Connect with us
355.9
Current index
+0.8%
Change from previous quarter
361.2
Current index
+0.8%
Change from previous quarter
387.7
Current index
+1.5%
Change from previous quarter
$9.44
Current price
($/sf)
-8.2%
Change from previous quarter
455.04
Current index
-1.0%
Change from previous quarter
$453.49
Current price
($/msf)
+1.2%
Change from previous quarter
$4.59
Current price
($/gallon)
+18.4%
Change from previous quarter
$3.80
Current price
($/gallon)
+5.5%
Change from previous quarter
$2.66
Current price
($/mmBTU)
+4.3%
Change from previous quarter
$1,485
Current price
($/net ton)
-4.4%
Change from previous quarter
$936
Current price
($/net ton)
12.8%
Change from previous quarter
$719
Current price
($/net ton)
-16.7%
Change from previous quarter
The ENR Materials Index cooled down over the past two months and is on pace for a 5 percent annual increase, contributing to the modest increases in the BCI and CCI indexes. Similar to the BCI and CCI, the Materials Index does not factor in the mechanical and electrical equipment cost impacts that have driven project costs higher than traditional measures of construction inflation.
Both of ENR’s leading indicators, Building Cost Index (BCI) and Construction Cost Index (CCI) settled down in September and October, bringing the annualized forecast for 2023 back to the 3-4 percent range we anticipated at the onset of the year. However, neither index reflects the continued dynamics of the mechanical and electrical supply chains, which are driving project estimates to reflect higher escalation outcomes and take a cautious approach in escalation forecasting.
Both of ENR’s leading indicators, Building Cost Index (BCI) and Construction Cost Index (CCI) settled down in September and October, bringing the annualized forecast for 2023 back to the 3-4 percent range we anticipated at the onset of the year. However, neither index reflects the continued dynamics of the mechanical and electrical supply chains, which are driving project estimates to reflect higher escalation outcomes and take a cautious approach in escalation forecasting.
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 continue to be stable. However, a few major manufacturers announced increases in October, pointing towards a diminishing supply of FGD gypsum (a byproduct of burning coal).
Natural Gas
Unleaded Gasoline
Diesel Fuel
Precast Concrete
Prestressed Concrete
Block and Brick
Hot-Rolled Band
Cold-Rolled Coil
Standard Plate
PG 58
WPU058102
162.86
Current index
-6.1%
Change from previous quarter
338.9
Current index
-3.2%
Change from previous quarter
196.61
Current index
-1.5%
Change from previous quarter
PVC
Copper
Carbon Steel
Plywood
2x4 S4S
Lumber and Plywood
258
Current index
-2.2%
Change from previous quarter
$925.01
Current price
($/msf)
+1.1%
Change from previous quarter
$1,040.66
Current price
($/msf)
+0.1%
Change from previous quarter
Aluminum
Zinc
Copper
$3.63
Current price
($/lb)
-8.0%
Change from previous quarter
$1.12
Current price
($/lb)
-4.1%
Change from previous quarter
$1.00
Current price
($/lb)
-0.5%
Change from previous quarter
Nickel
$8.19
Current price
($/lb)
-18.1%
Change from previous quarter
Download Report
+2.0%
6-Month change
+2.5%
1-Year change
+17.0%
3-Year change
+3.2%
6-Month change
+3.7%
1-Year change
+30.1%
3-Year change
+4.3%
6-Month change
+3.9%
1-Year change
+67.8%
3-Year change
Market Sentiment
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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 October 2023
Source: Engineering News-Record
Data as of October 2023
Source: Engineering News-Record
All data as of September 2023
Hover over the chart to see exact figures
Skilled Labor Index and Common Labor Index
According to the U.S. Bureau of Labor Statistics, the unemployment rate remained unchanged at 3.8 percent in September 2023. Nonfarm payroll (i.e., the number of workers in the U.S. except those in farming, private households, proprietors, non-profit employees and active military) employment rose by 336,000, nearly double the number Wall Street economists expected. Job gains occurred primarily in leisure and hospitality, government and healthcare.
U.S. Unemployment
Labor
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Pricing
Forecast Map
Supply Chain
Contact Us
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, subcontractor capacity pressures continue as large project backlogs move towards 2024, forcing subcontractors to be selective in bidding. Both MEP trade pricing and lead time increases are impacting projects. Interest rates continue to slow private, multi-unit development and office construction starts, but life sciences, healthcare and manufacturing projects move forward. Market indexes have now shown six straight months of increases.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Boston.
Pressures continue as temperatures cool
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
Labor issues—specifically skilled labor in mechanical and electrical trades—continue in Atlanta. The closing of a long-time union electrical contractor, combined with the large number of heavy electrical component projects in the area, further strains labor availability, forcing local general contractors to look out of state for qualified electrical trade subcontractors and qualified electricians.
Labor issues 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, most material prices have stabilized as expected, with mechanical and electrical equipment being the exceptions. Large data centers, chip manufacturers and electrification projects are still causing steep escalation and availability issues. Additionally, construction labor cost continues to escalate above the traditional indices. Despite these pressures, the local construction market remains strong, with numerous public and private project starts in healthcare, multifamily residential, higher education, K-12 schools, private office space and heavy civil sectors.
Market positioned for a strong 2024 despite pricing pressures
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
According to the Dallas Morning News, North Texas added 19,700 construction jobs, topping the nation in growth. Despite these additions, the labor shortage remains a considerable problem as subcontractors struggle to meet demands. One market sector driving this demand is higher education. On college campuses across North Texas, over $1 billion in construction projects are underway and more are in the planning stages.
Construction employment tops the nation
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.
As the D.C. Metro market continues to slow down in certain sectors, such as commercial office, multifamily and healthcare, there is a shift in focus to fill the backlog for higher education and K-12 markets, as they have more opportunity for project starts in 2024 and 2025. In the commercial office sector, some developers are exploring office-to-multifamily conversions to make use of underutilized spaces in distressed properties.
Supply chain strains for electrical gear, large generators and HVAC equipment remain due to the construction of data centers and battery manufacturing plants. We continue to advise Owners to purchase these items early to maintain project schedules as we anticipate extended lead times and higher-than-normal escalation rates for the foreseeable future.
Focus shifts to sectors less impacted by higher costs and interest rates
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
With rising interest rates and looming recession concerns, the overall construction market in Houston has decreased from past years. This reduction is most evident in the private sector as financing is more challenging to secure, and vacancy rates are approaching an all-time high. In the meantime, the public sector remains active with projects, such as Project 11, a $1 billion project at the Houston Ship Channel complex, and Wharf 6 at the Bayport Container Terminal. The K-12 market continues to see stability and growth as several school districts call for bond elections, such as the proposed $840.6 million for Katy ISD, $1.8 billion for Aldine ISD and $1.26 billion for Fort Bend ISD.
Weathering economic uncertainty
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
In Los Angeles, signs of slowing have manifested in the commercial building sector, with little to no office starts and subdued activity in retail and hotels. The institutional, multifamily and aviation sectors are proving more resilient and resistant to economic slowdown. An increasing trend of adaptive reuse and renovation projects and the integration of smart building technologies and automation highlight the need for adaptability in the region. A more stable supply chain is a welcome sight, with only a handful of manufactured components still proving problematic. The market continues to face challenges related to a skilled labor shortage, emphasizing the need for workforce development initiatives to attract and retain talent.
During signs of slowing, adaptability is fundamental
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
Despite material costs leveling off in South Florida, the shortage of skilled and unskilled trade partners continues to drive project costs higher. Large projects are abundant in the area, and competition for labor is high. To combat the risk associated with bringing new and inexperienced employees onto jobsites, trade partners are pricing work with higher built-in contingencies and profit margins. We expect neither the population growth nor the demand for housing, healthcare and other service-related projects to let up any time soon.
Continued growth equals continued inflation
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
Nashville, TN
Nashville’s strong economy continues to drive one of the fastest-growing populations in the country and the resultant expansion of the middle Tennessee construction market. Healthcare, office, higher education and State of Tennessee work remains strong. However, interest rates and economic uncertainty have caused developers to pause several projects. These pauses have created more backlog availability for the subcontractor community, and we are seeing increases in bid coverage and competitiveness.
Construction remains strong despite stall in developer work
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
Large projects continue to drive the NC/VA market, as multiple significant healthcare projects are taking steps forward in planning. While many of these projects won’t start construction until 2024-2025, they fuel optimism about the regional pipeline, offsetting concerns as select private developer projects face delays. In the short term, we have seen pricing level off in certain trades. However, a higher rate of escalation continues in the MEP trades due to increased equipment pricing and limited regional labor availability. We anticipate the market stabilizing in late 2024 and returning to the more traditional escalation in the 3-5 percent range annualized.
Large projects drive long-term market optimism
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
"Demand in the Life Sciences market sector is expected to persist. Lincoln Equities Group and HIG Realty published plans for three new manufacturing buildings at the Princeton West Innovation Campus. Construction is underway on HELIX’s first phase, led by SJP Properties and New Brunswick Development Corp., which will house tenants including Rutgers University, Hackensack Meridian Health and RWJ Barnabas Health. Onyx Equities and Machine Investment Group recently acquired the former Merck & Co. campus in Kenilworth and plans to renovate and construct new offices and lab spaces for their rebranded site, the Northeast Science and Technology Center (NEST).
Governor Murphy recently announced an additional $875 million in spending for construction projects in the public market sector, including $315 million for the NJ TRANSIT, $7.9 million for the Long Branch Station Pedestrian Tunnel, and more than $100 million to modernize garages for electric buses. Additionally, $110 million will go to the New Jersey Department of Transportation (NJDOT), and $450 million is allotted to New Jersey Schools Development Authority (NJSDA) for critical facilities needs throughout the state.
Construction starts have leveled off in the industrial market sector as new buildings are not leasing as quickly as during the market’s peak in 2021. Of the 9,300,000-SF delivered this year, more than 7,000,000-SF remain available, with additional industrial space already under construction for completion by year’s end."
Life sciences and public remain busy while industrial construction starts wane
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
In New York, while Healthcare Institutions continue providing new projects for Q4 2023 into Q1 2024, some existing projects have been paused to reassess programs and overall budgets but are anticipated to move forward by the end of the year. Other healthcare news is that Mount Sinai will shutter Beth Israel Medical Center by July 2024 citing financial difficulties with that campus. Life Sciences continues to be active with several major projects in the Metro Region through 2024. Cultural Institutions and other Public domain projects have recently come online, providing a fresh perspective on these sectors through Q2 2024.
In other market sectors, the 5 day a week office schedule is no more, but tenant demand is growing leading the office market to begin to stabilize. With regards to the Transportation/Infrastructure market sectors, several major projects are on track to come out Q1 2024, such as the Governor's Island Climate Hub and the MTA Bus Garage, leading to a robust 2024.
Slight pause in healthcare while other markets move forward
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)
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Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
Orlando, FL
Trade partners across Central Florida have become increasingly more selective in the projects they pursue. Several large, established firms have closed their doors after poorly managed projects failed to make the returns necessary to keep them afloat. Firms positioned with solid cash reserves have withstood the interest rate increases and escalation challenges that have cost-leveraged other subcontractors more significantly.
Trade partners more selective
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
Higher Education is leading the way in the Philadelphia and South Jersey markets, introducing multiple new projects throughout Q3. As the Healthcare market fluctuates, we continue to see a pace of new projects with many soliciting preconstruction services only so that they can better understand the viability of their projects. Life Sciences continues to push new projects and take advantage of talent in the market. Residential market demands have declined in the city, but waterfront development is making a resurgence with new park projects planned along the Delaware River. Significant MEP equipment lead times continue to cause difficulties, but we are seeing some settlement in material costs and escalations of the previous two years.
Positive signs in most markets
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
Arizona and the local Phoenix market continue to see new work. Mission-critical and housing continue at a fast pace in a strong market. The mission critical market continues to expand in the the valley with more clients like AWS, NTT, QTS and others exploring hyperscale projects. Semiconductor construction also continues but with guarded pauses based on the supply chain. A few of the potential suppliers for the 45 Billion dollar TWSC semiconductor plant have paused for several months in preconstruction to evaulate rising construction costs.
Hot market continues in the fall
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 returned to historically average volumes. Because firms are working through existing backlog, there is an uneasy calm—plenty of work today but uncertainty on the horizon. Prices are coming in at or below estimates for more projects, and competition is increasing. The opening of the Ritz Carlton this month and a push to get more employees back to work in the CBD will be a good temperature check on the health of the city's recovery from challenges of the last three years.
Back to school and back to "normal"
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
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
As we head into Q4 and 2024, the San Antonio market continues to be steady in the public and healthcare sectors, while developer-led and commercial office projects will likely continue to lag until some form of interest rate relief occurs. As the Fed continues implementing strategies to reduce inflation to its 2 percent target, economic data points more towards a U.S. "soft landing" rather than a widely-anticipated recession. As Texas has been historically resilient during depressed market times, and with the population increasing by nearly 1,000 people per day, the construction future is optimistic. Continued construction, however, means sustained labor issues as securing sufficient qualified labor remains a challenge, especially in the electrical trades.
Sustaining construction backlog and optimism as labor constraints continue
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
In San Francisco, the healthcare market is coming back strong as Providers scramble to provide services to an increasing elderly population and to bring their facilities up to new seismic mandates. Student housing in the Bay Area is in high demand as higher education entities take advantage of the recently signed Senate Bill 886, which brings $1.4 billion in public money to this sector. Construction challenges continue in the City due to ongoing social and economic issues, high-interest rates, hiring reductions by many large tech companies, and employees' continued reluctance to return to the office.
Cloudy with a chance of sunshine
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
In Seattle, we continue to see new projects procured and construction starting in the K-12, Higher Education and Aviation (manufacturing and airport) markets. However, new starts of Commercial and Residential projects are few and far between. Several school districts are going out for Bond money in the upcoming November elections, which could significantly impact projects in that market sector. The Commercial Office market continues to battle high interest rates, limited buyers, and, most notably, Microsoft consolidating their local office space back to their campus and giving landlords notice of their intent, which will return a significant amount of office space to the market. Public transportation construction remains strong, with several large projects recently being awarded. Competition for work continues as companies previously focusing on privately financed developer work scramble to fill their backlog.
Market sectors differ significantly
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)
Back to map
Tampa, FL
As the Tampa construction market remains one of the strongest in the country in nearly every market sector, the capacity of qualified trade workers is strained, labor costs continue to increase and local material supplies remain challenged. Although trends of the summer are continuing into fall, experienced teams can mitigate these challenges by continually collaborating with trade partners and by advising engineers of alternate materials, innovative solutions, and early release packages, particularly on long-lead mechanical and electrical items, such as chillers, switchboards and switchgears.
Summer trends continue into fall
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
In Connecticut, the year 2023 continues to match the construction growth of 2022, as reported at less than one percent by the Connecticut State Department of Labor. All patterns from the summer are continuing into the fall—tight competition, slow private money, long lead times on certain components, and subcontractors are still protecting their margins. Despite these continued pressures, we anticipate a return to normal escalation over the next few months to a year.
Fall season not resulting in changing of patterns
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)
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 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 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)
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)
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 Sentiment
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Want to discuss the local market position and forecast? Connect with Walt Chislak, Preconstruction Manager in South Florida.
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 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)
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 experiencing significant/ abnormal construction price inflation (+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)
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)
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Supply Chain
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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.
The construction supply chain improved over the past three months as manufacturers increased capacity and some construction segments slowed. Rising interest rates and market uncertainty in certain geographical markets prevented some developer-led projects from moving forward, primarily privately funded commercial office and residential projects. However, lower demand in these segments is being replaced by stronger demand in others.
The most challenging construction supply chain category continues to be electrical gear. To understand this demand, looking back at the top five vertical markets from 5–10 years ago compared to today is helpful. Previously, the top five vertical markets were Oil, Gas and Chemical, Healthcare, Multifamily Residential, Water and Wastewater, and Data Centers. Today, the top five vertical markets are Electric Vehicles, Healthcare, Multifamily Residential, Semiconductor Manufacturing, and Data Centers. One of these new markets, Electric Vehicles, barely existed ten years ago, and Data Centers have exploded far beyond what most could have imagined. This major shift began years ago but has been accelerated by the way we live and work post-COVID and by net zero carbon goals.
These trends have one thing in common: demand for electrical gear. Data Center demand is the leading consumer of electrical gear capacity and shows no sign of slowing down. On the capacity side of the equation, the four major electrical gear manufacturers have doubled unit capacity after investing billions of dollars in new plants and equipment. However, demand is expected to grow and consume this new capacity as quickly as it is added. All major manufacturers forecast lead times greater than one year for the next several years, with price increases averaging 8-15 percent annually.
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
Click a category to view details
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, as have inventory positions. Lead times for most items are in the 3-4 week range depending on quantities needed. Manufacturers are getting more aggressive on pricing of projects.
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Roofing Products
Click for further analysis
Structural steel pricing remains stable to slightly down. Raw material pricing is softening. Demand continues to be healthy, with many fabricators booked through Q2 of 2024.
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Structural Steel
Click for further analysis
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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Read More
Lumber pricing holds steady at pre-COVID levels. With the continued softening of housing starts, lumber pricing should remain at the current low levels.
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Wood-based Building Materials
Click for further analysis
Lab casework lead times are still holding steady at the standard range of 8-12 weeks. Raw material costs are stable and demand is healthy at this time. Stability in prices and lead times should remain in the near term.
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Lab Casework and Fume Hoods
Appliance prices have stabilized due to moderating demand from residential builders. Lead times vary by manufacturer and appliance type. However, lead times have greatly improved compared to a year ago. For planning purposes, continue to assume lead times in the one to three-month range.
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Appliances
Average lead times have improved the past 3 months and further improvement is expected over the next 6 to 12 months. General pricing is on track to rise 3-5 percent this year as a result of material and labor cost increases, a trend likely to continue in 2024. Elevator lead times vary depending on the category and manufacturer:
• Low-rise elevators range from 14-22 weeks
• Mid-rise elevators range from 20-24 weeks
• High-rise elevators range from 40-46 weeks
• Escalators range from 12-20 weeks
Lead Time
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Elevators, Escalators, Moving Walks
Inventory levels remain healthy and resultant lead times are only a few days for most orders. Pricing is also improving as copper, steel and PVC resin commodity prices have fallen over the past 3 months. Steel pipe prices have reduced the most based on lower demand from the automotive sector resulting from the strike. Lower demand from residential and private development projects has slowed the price increases from fixture manufacturers. Since July we’ve only seen 24 price increase notices (67 percent less than last quarter).
Lead Time
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Plumbing and Fixtures
As forecasted last quarter, lead times have improved over the past 3 months and improvements should continue over the next 6-12 months. Water-cooled chillers are now available between 12-24 weeks, and both custom and semi-custom air handlers are available between 10-30 weeks depending on the manufacturer. Again, the one exception is air-cooled chillers which still run 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 from all major manufacturers remain high and continue to increase due to demand outpacing capacity. While some categories—busway, dry-type transformers and low-complexity switchboards— have seen lead time improvement, others—medium and low voltage switchgear, liquid-filled padmount transformers, ATS and complex panelboard—have experienced increasing lead times. Price increases for 2024 are expected to be in the range of 8-15 percent.
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Electrical Gear
Click for further analysis
Lead times for most commodity electrical items have stabilized. Contractors and stocking distributors are actively reducing inventory levels as a result of high interest rates and lower demand, both current and forecasted. Although raw material prices for copper, resins, and steel are down, prices are still expected to increase 3-6 percent over the next 6 to 12 months due to inflation.
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Electrical Commodity Materials
Lead times for generators of all sizes remain in the 45-100+ week range. Manufacturers are still experiencing high demand for all genset sizes. In addition to long-lead components, manufactures are having difficulty supplying the sound enclosures on time, resulting in projects renting temporary generators for the meantime. Pricing for 2024 is now expected to rise 10–15 percent again.
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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
Click for further analysis
Door hardware and hollow metal door lead times remain in the 7-10 week range. We recommend continued close monitoring of electronic access control materials as 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
Contact Kez
Connect with us
Download Report
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
Market Sentiment
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The construction supply chain improved over the past three months as manufacturers increased capacity and some construction segments slowed. Rising interest rates and market uncertainty in certain geographical markets prevented some developer-led projects from moving forward, primarily privately funded commercial office and residential projects. However, lower demand in these segments is being replaced by stronger demand in others.
The most challenging construction supply chain category continues to be electrical gear. To understand this demand, looking back at the top five vertical markets from 5–10 years ago compared to today is helpful. Previously, the top five vertical markets were Oil, Gas and Chemical, Healthcare, Multifamily Residential, Water and Wastewater, and Data Centers. Today, the top five vertical markets are Electric Vehicles, Healthcare, Multifamily Residential, Semiconductor Manufacturing, and Data Centers. One of these new markets, Electric Vehicles, barely existed ten years ago, and Data Centers have exploded far beyond what most could have imagined. This major shift began years ago but has been accelerated by the way we live and work post-COVID and by net zero carbon goals.
These trends have one thing in common: demand for electrical gear. Data Center demand is the leading consumer of electrical gear capacity and shows no sign of slowing down. On the capacity side of the equation, the four major electrical gear manufacturers have doubled unit capacity after investing billions of dollars in new plants and equipment. However, demand is expected to grow and consume this new capacity as quickly as it is added. All major manufacturers forecast lead times greater than one year for the next several years, with price increases averaging 8-15 percent annually.
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Key Takeaways
The most challenging construction supply chain category continues to be electrical gear
Major electrical gear manufacturers are investing in new plants and equipment
Electrical gear price increases averaging 8-15 percent annually
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Metal Studs and Drywall
Availability and pricing of drywall continues to be stable, even as a few manufacturers announced increases in October, indicating a diminishing supply of FGD gypsum (a byproduct of burning coal). These increases did not stick, but this may change if supply continues to tighten.
Metal stud pricing is softening due to the drop in steel prices. As we move into the latter part of the fall and into winter, two main drivers—scheduled maintenance shutdowns at several mills and the UAW strike—will determine pricing direction. We will be monitoring this closely.
Ceilings, drywall, metal studs, flooring, paint, etc.
Metal Studs and Drywall
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insulation
Most types of insulation, including fiberglass and rigid foam, have recovered and are stable after the volatile pandemic period. However, mineral wool is one exception. Both Rockwool and Thermafiber are reporting longer than normal lead times, with some Rockwool products as long as 5 months. Manufacturers are citing plant maintenance and labor issues as the root cause.
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Insulation
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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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Contact Tom
Vice President of Strategic Supply Chain
Tom Park
Contact Robert
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
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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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