Winter 2024 Construction Pricing Snapshot
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Construction Cost Indices
Source: Engineering News-Record
Data as of January 2024
Materials Index
Construction Cost Indices
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 January 2024
Hover over the chart to see exact figures
U.S. construction unemployment increased to 6.9 percent as of January 2024. However, this is the third-lowest January rate on record as unemployment rates are not seasonally adjusted, and the figure is flat year-over-year from January 2023. Construction added jobs for the tenth consecutive month, nearly 11,000 jobs in January.
According to the U.S. Bureau of Labor Statistics, the unemployment rate remains unchanged at 3.7 percent, with the addition of 216,000 jobs in December 2023. Sectors seeing positive employment trends include government, healthcare and construction, while the transportation and warehousing sectors lost jobs.
U.S. Unemployment
Source: U.S. Census Bureau and Dodge Data & Analytics
Construction spending data for November 2023 and Dodge Momentum data is from December 2023
“Construction starts ended the year on a positive note. Looking ahead, the new year provides promise that positive momentum will continue to build,” said Richard Branch, chief economist for Dodge Construction Network. Construction starts grew 20 percent in December 2023, and most notably, nonresidential building starts rose 37 percent in the month. Total construction starts for the full year of 2023 lost 4 percent.
Construction Starts and Dodge Momentum Index
Source: Engineering News-Record
All data as of January 2024
Hover over the chart to see exact figures
Skilled Labor Index and Common Labor Index
The ENR Skilled and Common Labor indexes saw normal, moderate annual increases. ENR does not include technical skilled crafts in these indexes (Electricians / Mechanics) which have been under extreme pressure to meet demands in high-tech sectors such as mission critical/data centers, semi-conductor manufacturing and EV manufacturing. In some geographic markets with a shortage of key craft workers, high-tech sector projects are offering premium wage scales to attract the limited qualified workforce.
Skilled Labor and Common Labor Indices
Source: AIA, All data as of December 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.
In December 2023, the AIA Architecture Billings Index (ABI) score of 45.4 signaled more softening conditions for architecture firms. AIA reported, “Billings at firms declined for eight months of the year.” However, backlogs at firms were strong, with an average of 6.7 months. When asked about delayed vs. canceled projects, 86 percent of firm leaders reported significant delays over the past six months, while 64 percent had canceled or abandoned projects.
December 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 January 2024
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index, Drywall and Insulation data as of January 2024, Gypsum data as of December 2023
Drywall, Gypsum and Insulation
Source: Steel Benchmarker
All data as of January 2024
Structural Steel Inputs
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
PG 58 data as of February 2024
WPU058102 data as of January 2024
Asphalt
As we previously predicted, fuel prices declined as we moved into the winter. Higher than average seasonal temperatures have contributed, and experts also point towards the weakening Chinese economy creating a slight overage in the global crude oil supply.
While the BLS PPI index suggested a 12-month climb of 16 percent or more (5.8% for the quarter), the performance grade (PG) asphalt 58 costs per ton index only increased 2.6 percent in that same 12 month) period (-.3% for the quarter). Our recent market experience suggests the pace of asphalt pricing increases in 2023 was much closer to the PG 58 index.
Despite ups and downs in cold rolled coil and hot rolled bands, Structural steel pricing remains relatively flat for the quarter. The exception is hollow structural sections (HSS), which have been trending upward due to increases in coil steel (HRC) from which HSS is produced. Additionally, the high demand from certain markets, such as solar, is impacting HSS pricing.
Source: Engineering News-Record
All data as of December 2023
Concrete and Cement
Concrete supply is generally stable, but due to the regional/local nature of ready mix markets, some local shortages may occur. In terms of pricing, the steady increases previously seen in 2023 have leveled off.
PVC: PVC pipe prices continued to decline due to soft residential demand and lower resin costs.
Copper: Due to steady commercial demand, copper pipe prices have remained flat over the past three months.
Steel: Over the last quarter, a rebound in demand from the automotive industry has slowed price decreases.
Source: U.S. Bureau of Labor and Statistics Producer Price Index
All data as of December 2023
Piping
Lumber pricing remains flat at pre-COVID levels. As we move into 2024, all eyes are on the housing market, particularly its spring selling season and anticipated interest rate cuts.
Source: Engineering News-Record and U.S. Bureau of Labor and Statistics Producer Price Index
Plywood and 2x4 S4S data as of January 2024
Lumber and Plywoo4d data as of December 2023
Lumber and Wood
Nickel price decreases have continued and are close to a three-year low. Zinc pricing has remained relatively flat as demand continues to be low, in part due to the industrial outlook for China. Aluminum prices are generally stable. Copper prices increased slightly due to the long-term outlook that demand will outpace supply.
Source: Kitco
All data as of February 2024
Metals
Scoring
-50: decrease in volume
=50: neutral
50+: increase in volume
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The ENR Materials Index cooled in the second half of 2023, which resulted in an annual increase of 4.5 percent. This cooling contributed 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) remained flat for the past five months, resulting in an annualized change of 3-4 percent. 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) remained flat for the past five months, resulting in an annualized change of 3-4 percent. 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, lead times for mineral wool insulation have extended significantly. Lead times of 4-6 months should be expected for the remainder of 2024.
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Source: Engineering News-Record
Data as of January 2024
Source: Engineering News-Record
Data as of January 2024
Labor
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Forecasting Local 2024 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
Phoenix
Philadelphia
Washington D.C.
North Carolina/
Virginia
Cincinnati
Atlanta
Nashville
Houston
Dallas
San Antonio
Los Angeles
San Francisco
Boston/New England
Uncertainty in the world markets with China's recession, wars in the Middle East and Asia, the U.S. election cycle, and slow returns to office all contribute to some hesitation for investors. High interest rates are negatively impacting construction starts in multi-family and commercial life science spaces, as evidenced by the flood of commercial office and lab space for rent on the primary and secondary markets. With this slowdown, many larger private companies want to leverage capital to take advantage of a dip in the local market. This would benefit projects such as private education, aviation, transportation and other market segments where owners can use their capital for investments. The private pharmaceutical market is still seeing spending on manufacturing. Current market consolidation and competition for market share are driving local healthcare spending. The healthcare market should maintain this healthy spending over the next few years, with large-scale projects working through the approval process.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Boston.
Winter chill settles in for Boston market
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
Atlanta is beginning to see a shift from the traditional corporate commercial, higher education and healthcare markets to future-ready markets such as mission critical, technology, and manufacturing and distribution/warehousing. The shift adds pressure to a labor market already strained by the rapid pace of several large data center projects underway. The strong growth in the manufacturing and distribution/warehousing sectors adds additional pressure on the skilled labor market. The timing of project starts will be critical to the success of attracting subcontractor participation. The tech sector focused projects have put upward pressure on mechanical and eletrical equipment lead times and costs, but these projects are less complex architecturally and we have seen more stable prices in architectural, civil and structural trades in recent months.
Shift in market sectors adds to labor pressure
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
The local construction market remains strong, with most market sectors stable or busy. The only significant market sector currently slow is developer-led corporate commercial office space. However, private commercial development has remained strong. While the supply chain issues and large material price escalation have mostly diminished, there is still significant wage escalation pressure. This wage pressure will increase overall construction cost escalation in the Ohio/Kentucky/Indiana region for 6-12 months.
Construction demand remains strong
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
The DFW Metroplex continues to have opportunities entering 2024. In the aviation market, DFW airport is slated to release a new Terminal F and reconfiguration to the existing Terminal E, with a budget of $4 billion. The City of Dallas is planning an expansion to the Kay Bailey Hutchison Convention Center (KBHCC), with a budget of $3.7 billion. The City of Fort Worth also plans to expand its convention center, with a budget of $400 million. In the healthcare market, several large projects are in the planning stages, including UTSW-Children's replacement hospital with a budget of $2 billion, JPS's new bed tower and pavilion with a budget of $800million, and Terrell State Hospital with a budget of $400 million. In the higher education market, Collin County College District allocated $360 million of work on three campuses. The K-12 market continues to be hot as more people relocate into the area. Prosper ISD approved a new bond worth $2.7 billion to build new schools, a performing arts center and safety and security upgrades to their existing campuses.
With the new year comes new opportunities
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.
Demand for multi-family housing remains strong, but rising costs and interest rates have stalled new construction starts. During this slowdown, some developers explore office-to-apartment conversions for viability, while others with available capital assess purchase opportunities on distressed properties. This slowdown in office and multi-family markets has forced more competition in K-12 and higher education markets from contractors not traditionally active in these markets. In science and tech, the market is generally slow, but we see continued high demand for life science facilities in Maryland. The construction market for data centers in Northern Virginia remains active, expanding to other parts of Virginia and Maryland due to the strain on the power grid in localized markets. Additionally, data center and electrification-related construction are still straining the labor, equipment, and subcontractor resources, specifically in the mechanical and electrical trades. This strain continues to cause steady escalation and increasingly long lead times. We continue recommending early procurement to our clients for mechanical and electrical equipment and using design-assist subcontractors to support these efforts. In most other trades, escalation and lead times have stabilized to traditional levels.
Slowdown in office and multi-family forces increased competition in stable markets
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
Although Houston has shown a dramatic slowdown in commercial development in both office and mixed-use, other market sectors remain stable and, in some cases, grow. One of these is in healthcare, with Memorial Hermann planning on two new hospital towers for Katy and Clear Lake with a combined budget of $600 million. Harris Health System is underway with their new LBJ replacement hospital with a budget of $1 billion. The University of Texas and MD Anderson Cancer Center are in partnership on a new cancer treatment hub with a budget of $2.5 billion. Another market sector that continues to grow is K-12. Alief ISD approved a bond of $500 million for district-wide improvements. Aldine ISD approved a bond of $1.8 billion to build, renovate, and update safety and security projects throughout their district.
Resilience and growth amidst looming 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)
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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 Andy Kim, Preconstruction Manager 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
Miami-Dade and Lee counties are experiencing growth, impacting several market sectors, such as K-12, higher education and healthcare. Despite healthcare funding challenges, services are more important than ever as the population ages and grows. Additionally, some hospital facilities are aging and require upgrades and renovations to meet new building codes and technological advances. After recent events like Hurricane Ian and the 500-year storm that flooded Broward County, FEMA allocated hundreds of millions of dollars to the state to upgrade healthcare facilities.
In aviation, increased travel and the prioritized transportation infrastructure improvements have contributed to all three major South Florida airports (MIA, FLL, PBI) looking to spend billions of dollars in recent funding. The same goes for the Ports.
Labor demand in South Florida remains elevated. Trade partners report having to pay significantly higher wages to prevent poaching from competitors, including increasing contingencies for maintaining such labor through project completion.
Regarding construction materials, most have held their recently stabilized price trends, but some continue escalating, such as concrete ready mix, cast iron piping, and electrical switchgear. Lead times for electrical equipment are still elevated, but the wait for some brands of mechanical equipment is starting to level off.
Strong growth creates competition for trade partners
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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Nashville, TN
Nashville remains one of the high-growth cities in the U.S. The population migration trend to our sunbelt city continues to support growth in public and private construction markets even though market uncertainty affects commercial markets. The fate of private development projects, which have fueled much of Nashville’s recent growth, has yet to be seen. We still see some development projects going forward and anticipate the East Bank as the next frontier of both private and public work. Market sectors in middle Tennessee, such as public, infrastructure and higher ed, remain strong. Healthcare, mission-critical, aviation and manufacturing remain stable. The commercial office sector faces high vacancy rates, slowing office development. Urban multifamily developments are facing market saturation and more competitive rental rates. With the slowing of new commercial developments throughout 2023, subcontractor capacity and backlog have increased, resulting in improved bid coverage and more stable/tighter pricing. We anticipate more “normal” escalation rates throughout 2024 as the region and industry monitor economic conditions.
Nashville remains one of the high-growth cities in the U.S.
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
The region continues to experience high population growth, promising opportunities for the industry, particularly in markets like K-12 and healthcare. In contrast, growth in other areas, including developer office and life science projects, has slowed substantially. Large-scale projects within the mission-critical, pharma, and advanced manufacturing sectors are ongoing, causing a significant resource draw, especially in MEP trades. This resource strain and ongoing equipment cost pressures have contributed to continued cost increases for these trades. Conversely, costs associated with CSA trades have largely stabilized. Despite sector-specific challenges, there's optimism about the overall market health due to a robust pipeline of projects spanning multiple sectors, including advanced manufacturing, revenue-generating healthcare projects, and public work.
Flattening CSA Costs Amid Intense MEP Resource Demands
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
The Port Authority of New York and New Jersey (PANYNJ) 2026 Capitol Plan includes $32.2 billion for infrastructure improvements, with $2.05 billion going towards a new AirTrain linking the Northeast Corridor (NJ Transit and AMTRAK) to the new EWR Newark Liberty Airport Terminal A and existing Terminal C. The PANYNJ is releasing this project in multiple design-build packages, with the most recent award of $570 million to the Doppelmayr Group out of Austria.
In higher education, Princeton University and the Princeton Planning Board will review a concept plan for a new 467,000-SF complex dedicated to Quantum Science and Engineering. “The Quantum Institute” would include three linked buildings on the East Campus near Powers Field at Princeton Stadium, the Tigers’ home football field since 1998.
RWJBarnabas Health and its partners currently have more than $1 billion worth of new cancer treatment facilities under construction in healthcare. The largest project—a 12-story, 510,000-SF, $750 million facility—will provide cancer prevention and clinical care services in New Brunswick. Other projects include a five-story, 137,000-SF, $225 million hub for cancer-related services in Livingston and a $200 million outpatient center in Tinton Falls. All three buildings are scheduled to open in 2025.
Infrastructure upgrades, higher ed and healthcare remain strong
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, healthcare institutions continue providing new projects for Q4 2023 into Q1 2024. Several institutions look to spend more on infrastructure as they bring their facilities into the 21st century. Healthcare REITs are looking for acquisitions of senior living and assisted living properties. Life sciences projects are still active, with several significant projects in the Metro Region backed by NYC through 2024. However, developer life sciences have slowed as interest rates have risen and developments have had difficulty obtaining tenants. Similarly, the commercial office sector remains slow as tenant rates are at all-time lows. Cultural institutions and other public domain projects have recently come online, providing fresh activity in these sectors through Q2 2024.
Looking forward to a robust year in healthcare and S&T
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
The competition for labor, specifically those in higher-skilled trades such as electrical, HVAC, and plumbing, has caused dramatic increases in costs for these construction services. Companies who perform these trades weigh risks associated with being unable to perform the work they are contracted to do and are pricing work accordingly. While commodity-driven components have leveled off, wages have increased, and anticipated production has fallen. Coupled with a lack of qualified firms able to perform large projects, the cost for these trades has risen to levels that would have seemed absurd just a year ago. We anticipate market correction, but this does not seem likely in the near future.
Labor shortages continue fueling escalation
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
Philadelphia welcomes new mayor, Cherelle Parker, this year. With the change in leadership, new initiatives are being introduced to reenergize the market, especially in construction. One of the more significant initiatives is sustainability. Owners are integrating sustainable design into their new projects and balancing the competitive demand for adaptive reuse of older facilities that may need to be revised to present design standards. In healthcare, the outlook for new starts is positive and multiple projects are in the pipeline. There is substantial activity in preconstruction with Main Line Health, Thomas Jefferson University Health, Penn Medicine, Inspira, Cooper and CHOP. In higher education, local universities continue working through new ways of recruiting and educating students in person and virtually. We see residential hall projects, STEM-based additions, and new buildings in the pipeline for all the colleges and universities. Private life science campuses in our region continue developing, and we see many opportunities to support this growth spurt. Additionally, mixed-use developments are gaining traction, with many residential, commercial, and retail developments in the same building.
Healthcare and higher education markets remain strong
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
Real estate firm Newmark Group recently announced Phoenix as the top growth market for manufacturing construction in the U.S. Most of this construction is currently in the semiconductor, EV and solar industries. One example is the Taiwan Semiconductor Manufacturing Co.'s facility, which is still going strong despite Phase 2 being delayed a year due to finances. Because of this strong market, the availability of skilled trade labor is limited, especially in the electrical and mechanical labor force.
Phoenix named top growth market for manufacturing construction in the U.S
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 market is experiencing a similar number of opportunities as compared to last quarter, but contractors are being more selective since competition is increasing. Private development is down substantially, especially in hospitality, senior housing, retail and office markets. The technology sector—data centers and semiconductor manufacturers—continues to power the market. Fees are stable around historical averages. A continued focus on diversity is encouraging partnerships for pursuits.
Opportunity similar to last quarter
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)
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Market is stable and construction pricing/ inflation is within traditional indices (less than 3% per annum)
San Antonio, TX
"San Antonio continues to experience steady construction growth across multiple sectors. Aviation is strong as construction on the $2 billion San Antonio International Airport (SAT) expansion and renovation will commence later this year. Healthcare and mission critical are stable with large ongoing projects in either preconstruction or construction phases in both sectors. The K-12 sector has billions of dollars of work in progress, and public higher education remains stable. However, the election cycle reduced new bond program opportunities in 2024 and will likely lead to a slight slowdown in these sectors.
There is an enhanced focus on downtown growth in San Antonio. There are escalating discussions around the potential for new basketball and baseball sporting venues, which may lead to future construction opportunities. Additionally, San Antonio is home to Joint Base San Antonio (JBSA), which includes four primary military locations with potential upcoming federal opportunities.
Subcontractor capacity is improving, leading to improved bid coverage, enhanced competition, and generally more predictable and favorable pricing, especially in the non-mechanical and electrical trades."
Continued growth and increased subcontractor capacity
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
Aviation continues to thrive across the Bay Area. The most recent estimates suggest that demand for air transport will increase by an average of 4.3 percent per annum over the next 20 years. San Francisco International Airport's strategic plan for the next five years includes completing the Terminal 3 West Modernization Program, which will be mainly self-funded through passenger and retail revenue. Sacramento International Airport has a $1.3 billion garage and gate expansion program. Higher education is also flourishing with increased demand for student housing. The healthcare market is focused on small to midsize renovation projects rather than new construction, and funding for these projects is steady. Life science and commercial development continue to decline due to the low demand for lease space and the high cost of borrowing money. Tech companies are downsizing, putting more sub-lease space on the market and looking for lower-cost regions, such as Sacramento, for possible expansion. Despite softening in some sectors, like commercial office and life science, most local trade subcontractors still report labor challenges. The construction pricing in the greater Bay Area is still seeing escalation, but it is closer to the average pre-pandemic pace of escalation. Equipment lead times for electrical and mechanical continue to be longer than usual.
Aviation leads construction in the Bay Area
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
Seattle's construction market remains buoyant. Residential is slow, with most projects completed and few projects starting. The commercial office market continues to struggle locally due to oversupply, as Amazon and Microsoft have non-renewed their leases amidst the public safety fears in downtown Seattle. However, strong growth in other sectors has offset this pause in commercial office and residential markets. For example, several providers are beginning to study new patient towers in healthcare. In post-pandemic years, we have seen significant growth in the data center, electrification and battery manufacturing sectors, especially in the Wenatchee market. Manufacturing/industrial and mission critical projects east of the mountains are starting to commence construction on data centers and an electrification manufacturing complex.
Construction market remains buoyant
Want to discuss the local market position and forecast? Connect with Dan Curtiss, 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
Tampa's job growth in construction remains one of the strongest in the country. This growth contributes to the continued strain on the availability of qualified trade workers and the increased labor costs for skilled labor in HVAC, plumbing and especially the electrical trade. Though local material supplies remain challenged, overall supply challenges have stabilized. The wait for mechanical equipment, such as RTUs, AHUs, and chillers, has leveled off. However, lead times for electrical equipment, particularly switchboards and switchgear, are still elevated.
Construction market remains strong, labor 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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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 Gina Garcia, Preconstruction Manager in San Francisco.
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 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)
See a summary of our market sector performance and local escalation forecast below.
Market Sector Overview
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Local Escalation Forecast
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Market is experiencing and/or is expected to experience significant/ abnormal construction price inflation (+5% per annum)
Market is busy and construction price inflation is/is expected to be above normal (between 3 and 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 Sector is very busy with numerous large active projects either in Preconstruction or Construction
Market Sector is stable with some large active projects either in Preconstruction or Construction
Market Sector is slow with few large active projects either in Preconstruction or Construction
Skanska is not tracking this sector closely enough in our regional market to comment
Key
Market sector summary
Local escalation summary
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Pricing
Forecast Map
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 materials inventory is healthy. Lead times for most items are in the 3-4 week range depending on quantities needed, and we expect this trend to continue through at least the first half of 2024.
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Roofing Products
Click for further analysis
Structural steel pricing remains stable. However, the increase in demand following the settlement of the automotive strike caused Hot Rolled Coil (HRC) to trend upward, which slightly escalated Hollow Structural Section (HSS) pricing. We expect HRC prices to decrease over the next three months.
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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 is holding steady at pre-COVID levels. However, with the housing market being the primary driver of lumber demand and pricing—and with three rate cuts signaled by Federal officials for 2024—we may see a significant increase in housing demand.
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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 and should remain stable in the near term. However, recent steel cost increases may pressure pricing upward.
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Lab Casework and Fume Hoods
Appliance lead times have returned to pre-pandemic levels. Inventories have recovered, and we are no longer seeing supply chain shortages.
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Appliances
The overall market for elevators has slowed, resulting in improved lead times and stable pricing. While there may be some cost increases on material and labor, general price increases are expected to be minimal in 2024.
• Low-rise elevators range from 10-20 weeks
• Mid-rise elevators range from 20-24 weeks
• High-rise elevators range from 40-46 weeks
• Escalators range from 18-24 weeks
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Elevators, Escalators, Moving Walks
While the PPI for steel and copper pipe has been relatively flat over the last three months, some forward-looking indicators suggest that average per-pound pricing will decrease over the next 3-6 months. For PVC, prices fell three percent over the past three months, and more significant decreases are projected in the next three months. Due to soft residential demand and lower raw material prices, PVC pipe prices are particularly weak due to the slowdown in residential construction. Copper and steel pipe prices are still high compared to pre-COVID levels, but we expect softer demand and lower raw material prices to drive a decrease in pipe prices. Regarding fixtures, four manufacturers announced price decreases and only 14 announced increases—the lowest number of increases in more than three years.
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Read More
Plumbing and Fixtures
As forecasted last quarter, lead times improved over the past 3 months. However, due to continued supply chain issues, we are still experiencing frequent three-month rescheduling delays by manufacturers. Specifically, HVAC manufacturers struggle to receive compressors wire harnesses and control boxes for their products. Water-cooled chillers are still available between 12-24 weeks, and both custom and semi-custom air handler lead times are holding steady between 10-30 weeks depending on the manufacturer. Data center demand continues consuming much of the air-cooled chiller supply, pushing lead times further to the 50-65 week range. As mentioned last quarter, we will likely only see a 3-5 percent price increase from manufacturers this year.
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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—more than 52 weeks—compared to pre-pandemic levels. However, most manufacturers have significantly reduced switchboard lead times from 90 to 60 weeks. Busway, low voltage switchgear, and dry-type transformer lead times are trending down slightly. Still, medium voltage switchgear, liquid-filled pad-mounted transformers, ATS and complex panelboards have experienced increased lead times. We expect 2024 price increases in the range of 8-15 percent.
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Electrical Gear
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Lead times for most commodity electrical items have stabilized. Due to high interest rates and lower current and forecasted demand, contractors and stocking distributors are actively reducing inventory levels. Although raw material prices for copper, resins, and steel are down, we expect prices to increase 3-6 percent over the next 6-12 months based on inflation.
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Electrical Commodity Materials
Manufacturers are still experiencing high demand for all genset sizes. Lead times for generators smaller than 1MW remain in the 45-75 week range, however data center demand for large, above-1MW-sized generators is pushing lead times to two or more years. Custom enclosures are adding additional lead time to all generator sizes. We expect pricing for 2024 to rise 10–15 percent.
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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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Lead Time
Price
Transportation
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Door hardware and hollow metal door lead times remain in the 7-10 week range. We recommend continued close monitoring of lead times for electronic access control materials.
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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
Wood-based Building Materials
LT: Lead Time | $: Price
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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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2
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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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Recent national and global events, including the end of the automotive strike and shipping disruptions in the Suez and Panama canals, have created uncertainty. However, the overall status of the commercial construction supply chain this quarter is very positive. While the automotive strike introduced volatility in the steel market, price spikes that followed the automotive strike settlement are expected to level out over the next few months. Additionally, many construction material and equipment manufacturers have improved their supply chain resiliency by implementing dual and regional North American sources to mitigate impacts of shipping disruptions from Asia.
HVAC and electrical gear lead times remain elevated but are improving based on investment in capacity and a slowdown in some residential and commercial mixed-use projects. HVAC equipment escalation is expected to slow to the traditional 3-5 percent range. Strong data center demand continues to put unprecedented pressure on certain electrical gear, standby generators/enclosures and air-cooled chiller manufacturers.
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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 continue to be stable. Manufacturers have again announced increases at the start of 2024, but we do not expect them to stay put. All eyes are on residential housing starts as we move into the spring, as a strengthening housing market will pressure pricing.
In response to HRC price increases, metal stud producers announced 10 percent increases in December, January and February. As of mid-January, the HRC market has softened and could bring pricing back down if the trend continues.
Ceilings, drywall, metal studs, flooring, paint, etc.
Metal Studs and Drywall
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insulation
Fiberglass insulation lead times are steady and currently stand in the 6-12 week range. However, mineral wool insulation supply continues to struggle with lead times in the 4-6 month range. Rockwool, a major manufacturer of the product is sighting plant maintenance downtimes and recovery from a labor dispute as affecting their ability to meet orders in a more timely manner and a general uptick in demand. Some projects are considering Polyiso products as an alternative. We expect these extended lead times to remain throughout 2024. We may see some improvement, but it could be very slow.
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Insulation
Supply chains feeding concrete, structural and architectural categories are stable. Pricing is flat and lead times are back to pre-pandemic levels, with a couple of exceptions:
The first is pricing of Hot Rolled Coil steel (HRC), which feeds several construction supply chains, most notably metal studs, drywall grid, suspended ceiling grids and hollow structural sections (HSS). HRC pricing has increased from $700/ton in September 2023 to $1,135/ton in January 2024. As a result, metal stud manufacturers announced three separate increases of 10 percent each in the months of December, January and February. Since January, HRC pricing has fallen to just below $1,000/ton.
The second exception to be aware of is the vastly extended lead times for mineral wool insulation. In mid-2023, mineral wool lead times were at 3-4 weeks. By September/October of that same year, lead times increased to more than 15 weeks and have worsened. Current lead times stand at 20-24 weeks. However, we may see slow, gradual improvement this year.
Fall 2023 Construction Pricing Snapshot
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Materials and Commodities
Industry Indices
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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
Aspalt
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
While the BLS index suggested a 12-month climb of 16 percent or more (5.8% for the quarter), the performance grade (PG) asphalt 58 costs per ton index only increased 2.6 percent in that same 12 month) period (-.3% for the quarter).Our recent market experience suggests the pace of asphalt pricing increases in 2023 was much closer to the PG 58 index.
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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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.
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.
Discover more
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
Click a category to view details
Special considerations:
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 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
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 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
Click for further analysis
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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Lead Time
Price
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)
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
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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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