Skanska USA Building Construction Market Trends

Materials

Forecast Map

Construction / Labor

Forecasting Local 2021 Construction Costs Across the U.S.

This map reflects USA Building local Project Planning Services team leaders’ opinions of market volume and capacity and is not based on published analytics or third-party forecasts.

Click on the map locations to see construction forecast details for a specific city or region.

Introduction

Download Report

Cautious Optimism After a Forgettable Year

Seattle

Portland

Phoenix

Los Angeles

San Francisco

Miami/Ft. Lauderdale

Orlando

Tampa

New Jersey

New York

Boston

Philadelphia

Washington D.C.

North Carolina/ Virginia

Cincinnati

Atlanta

Nashville

Houston

Dallas

San Antonio

Seattle, Washington

Local Insight and Commentary

Next 6 months

6 months - 1 year

1 - 2 years

Material Prices Rise as Economy Remains Uncertain

Map 1

Map 2

U.S. Economic Indicators Real gross domestic product (GDP) decreased at an annual rate of 31.4 percent in the second quarter of 2020, according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent. Total nonfarm payroll employment rose by 661,000 in September, and the unemployment rate declined to 7.9 percent, as reported by the U.S.

Market continues to be at capacity for many trades as the current book of work (including many $500M+ projects in the region) is still to be completed. Aggressive fees are being seen for projects starting construction mid-2022 onwards. Several of the major union agreements are up for renewal mid-2021, which will give a good indication of where costs are likely to move in the next couple of years.

Want to discuss the local market position and forecast? Connect with Alan Dunbar, Regional Director of Preconstruction.

Market is stable and construction pricing / inflation is within traditional indices (less than 3% per annum)

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 recessed and construction pricing / inflation is flat or negative

COVID-19 certainly impacted construction productivity in 2020, most significantly from April through September. However, contractors, their trade subcontractors and industry providers have proven to be very resilient and quickly established protocols and processes to keep work going safely. The savings that were perhaps anticipated by the pandemic slowdowns were partially offset by the new costs of doing business safely. The introduction of COVID-19 vaccines into the market, albeit slowly and likely prolonged through 2021, is awakening some sectors and projects that had been on hold. The investment markets remain strong and emboldened by the hope the vaccines will remove business barriers. The Architectural Billings Index has made a large recovery, and despite still being below the “50” benchmark, has moved back closer to pre-COVID levels.

In general, we are seeing increases in metal material costs of 10 percent for the quarter. We may see a similar trend in Q4. As supply stabilizes to meet current demand, we will be watching future demands. With many industries seeing enormous impacts from the pandemic, we do not expect demand to be up in 2021 and a likely retreat of steel pricing could occur.

The COVID-19 pandemic lockdowns sapped steel demand for many industries, which has steel plants running at multi-year lows. Plants are running at only 65 percent capacity. Pent up demand from the pandemic has increased ahead of the pace of supply capabilities resulting in near term opportunities for mills to increase pricing.

Construction escalation forecast report and analysis for key U.S. locations and materials developed by Skanska USA Building's Project Planning Group. The full report is available for download in the navigation menu or at the bottom of this page.

Oil, Gas and Fuel

Drywall, Gypsum and Insulation

Concrete and Cement

Steel and Aluminum

Asphalt

Piping

Lumber and Wood

Metals

Construction Materials and Commodities Pricing

Q4 2020 Construction Market Trends, Pricing and Costs

1. Increase in Supplier Notices

2. Lower Demand for Steel in 2021

Construction, Architecture and Labor Indices

This Architecture Billings Index (ABI) demonstrates whether or not architectural firms are billing for or signing new design contracts. A score of 50 is neutral, above 50 means they are seeing an increase in volume, and below 50 means a decrease in volume. The construction industry feels the impact of this index with a 9 to 12 month lag time.

Architecture Billings Index

Looking for more information on construction trends, materials and pricing?

Local Construction Cost Forecast

Construction Cost Forecast Key

Connect with us

Visit our website

Click to download

Download the full Skanska USA Building Q4 2020 Construction Market Trends, Costs and Pricing Report

Hover over the chart to see exact figures

Construction Cost, Building Cost and Material Price Index

Construction spending in November 2020 was estimated at a seasonally adjusted annual rate of $1,459.4 billion, 0.9% above the revised October estimate of $1,446.9 billion. The November figure is 3.8% above the November 2019 estimate of $1,405.5 billion. During the first eleven months of 2020, construction spending amounted to $1,314.1 billion, 4.4% above the $1,258.8 billion for the same period in 2019.

Skilled Labor Index and Common Labor Index

Overall construction uneployment rates rose to 9.6% in December 2020 from 7.1% in September 2020. Construction added 51,000 jobs in December 2020, but employment in the industry is 226,000 below its February 2020 level. Employment increased in nonresidential specialty trade contractors and in heavy and civil engineering construction. Hourly wages rose from $31.82 in September 2020 to $32.02 in December 2020.

Portland, Oregon

Total project opportunities are down in the last 6 months and competition is much higher. Fees are falling slightly as most projects are seeing more than five GCs proposing. Some larger local projects that are dependent on federal involvement are taking a wait-and-see approach until the new administration is in place.

Want to discuss the local market position and forecast? Connect with Steve Clem, Regional Senior Vice President of Preconstruction.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

San Francisco, CA

Clients are receiving several bids from the GC and subcontractor market for available opportunities. Subcontractor prequalification is essential to ensure that all team members will deliver on very competitive bids. Commercial office and aviation markets are slow due to COVID-19, but many other market opportunities continue to move forward.

Want to discuss the local market position and forecast? Connect with Michael Nelson, Preconstruction Director of Estimating General Expenses in San Francisco.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Los Angeles, CA

At present the Healthcare and Higher Education markets are most stable in terms of projects proceeding with funding. The Higher Education market is still spending bond money approved in prior years. In other commercial markets we are seeing projects hitting the market for pricing but the availability of funding for many of those is questionable. In general, subcontractors are seeing a need for more personnel and they are experiencing lower productivity as they bring in new staff for the work and deal with COVID rules. Union wage negotiations reflect increasing labor costs through 2023. Material escalation is still happening, as producers have not recovered from all challenges they have had with production, specifically in finish materials and equipment.

Want to discuss the local market position and forecast? Connect with Dan Haas, Preconstruction Director in Los Angeles.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Phoenix, Arizona

Want to discuss the local market position and forecast? Connect with Andrew Rabasca, Regional Director of Preconstruction.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

There is plenty of on-going, current work and backlog work, which has a 99% confidence of starting to keep the market busy through Q2/Q3 of 2021. Additionally, requests for bids from other GC’s to our trade partners have not slowed down. Most of our trade partners were (for the past 2 to 3 years) operating above capacity. The slowdown has now allowed them, in general, to operate at capacity, i.e., most overtime has disappeared from the market.

San Antonio, Texas

Want to discuss the local market position and forecast? Connect with Chris Hillyer, San Antonio Senior Vice President of Preconstruction.

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

The San Antonio market continues to be stable, competitive and yielding favorable pricing and bidding and is expected to continue in the short term. K-12 bonds that were held off in 2020 due to COVID/election year are expected to start to see momentum to potentially be put to vote later this year, and the higher education sector is waiting on what the state legislature will do with Tuition Revenue Bonds (TRBs) that help fund higher education projects and will impact the construction industry statewide.

Local Insight and Commentary

Dallas, Texas

Want to discuss the local market position and forecast? Connect with Linh Le, Houston Vice President of Preconstruction, Estimating and General Expenses.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

North Texas has a significant amount of opportunities in the higher education, corporate relocation and mission critical sectors that are on-going or scheduled for starts in 2021. The bidding market is extremely competitive as both GC and subcontractors continue to build their backlog for 2021, resulting in a favorable pricing environment.

Houston, Texas

Want to discuss the local market position and forecast? Connect with Linh Le, Houston Vice President of Preconstruction, Estimating and General Expenses.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

The Houston market has less opportunities than the North Texas market in terms of projects that are on-going or scheduled to be released, and the oil and gas sector long term outcome is still uncertain. Both factors are contributing to fierce GC competition as companies strive to build backlog for 2021. Some commodities, however, are spiking due to demand higher than expected.

Nashville, Tennessee

Want to discuss the local market position and forecast? Connect with Dan Finch, Nashville Vice President of Preconstruction.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Steel material pricing (structural steel and reinforcing steel) has increased, however, the hope that more competitive subcontractor pricing would come due to cancelled projects and reduced demand has not occurred. There is increased interest and an increase in the amount of sub bids received, however, this additional competition has not yet led to more aggressive pricing by subcontractors.

Cincinnati, Ohio

Trade contractors are continuing to hold low margins in an effort to fill backlog. There is however significant inflationary pressure in material pricing. We are expecting this to begin to drive trade contractor pricing higher (back to normal levels) once they have a comfort level that the market is stable. Indications are that we will see that pricing inflation begin in the next three to six months.

Want to discuss the local market position and forecast? Connect with Jeff Smoker, Vice President of Preconstruction in Ohio.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Atlanta, Georgia

The new project workload in Atlanta is slowing as project starts are still on hold and competition will drive down pricing for at least the next 6 months. After the presidential inauguration, projects currently on hold are expected to move forward.

Want to discuss the local market position and forecast? Connect with Kayle Gastley, Senior Vice President of Preconstruction, Estimating General Expenses in Atlanta.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Tampa, Florida

Downtown Tampa is very busy with an ongoing large scale downtown development district. Labor is at a premium and will be for some time but overall is trending towards stability.

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Miami / Ft. Lauderdale

Several large projects are closing out, while several are on the horizon, the overall market seems to be leveling off as the boom in tower cranes for residential projects will eventually slow.

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Orlando, Florida

Orlando has become very competitive with the slow in work related to Disney and Universal. Overall the market continues to stay stable.

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

North Carolina / Virginia

Many trade partners are still reducing margins in an effort to secure immediate backlog to fill in where other projects have been delayed. However, in many cases this is only enough to offset continued increases in key commodity prices and decreased labor efficiencies due to COVID-19 requirements. The preexisting labor shortages in local markets have also limited the extent of downward pressure on labor costs. The volume of work either on hold or in the pipeline is creating optimism for a potential rebound, however the pace of construction cost escalation will largely be dictated by how quickly the previously delayed projects move forward into construction.

Want to discuss the local market position and forecast? Connect with Will Senner, Vice President of Preconstruction in North Carolina and Virginia.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Washington, D.C.

The DC Market is currently busy. Due to COVID, we are seeing an increase in office space vacancy around 15% up from the normal range of 5% to 10%. Because of this there’s been an increase in residential projects including apartments with dens and flexible working space. We have also seen an increase in pop-up healthcare facilities and MOBs. Government impacts such as the protest and inauguration have also had an impact, causing some developers to push bids to Q1 2021.

Want to discuss the local market position and forecast? Connect with Apryl Webb, Vice President of Preconstruction, Estimating General Expenses in Washington, D.C.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Philadelphia, PA

Healthcare is starting to pickup, and we are seeing more RFP's. Higher Education continues to be stagnant. Commercial work is active, and we are seeing opportunities. Also seeing more Life Science opportunities, and have picked up a few projects recently.

Want to discuss the local market position and forecast? Connect with James Lane, Vice President of Preconstruction in Philadelphia.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

Boston, Massachusetts

Prior to the pandemic the greater Boston market was experiencing inflation just about 5%. The pandemic has slowed inflation down to under 3% mostly due to paused and delayed projects. The Life Science and Healthcare markets in particular though have seen continued construction activity throughout the last year but not at high enough levels to make up for losses in other market sectors. As the vaccine rolls out and restriction are lifted we anticipate the entire market will rebound with startups of previously delayed projects and new develoment. This will result in an increase in inflation to at least pre-pandemic levels if not more over the next couple of years.

Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Estimating General Expenses in Boston.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

New York, NY

Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Estimating General Expenses in New York.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

We see stable growth in the healthcare market based on what we see in the pipeline for at least the next 12 months, as well as additional opportunities in the aviation sector. There has also been significant growth in the higher education and life sciences market sectors with owners and institutions showing enhanced interest in these areas.

New Jersey

Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Estimating General Expenses in New Jersey.

Local Insight and Commentary

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

Construction Cost Forecast Key

Next 6 months

6 months - 1 year

1 - 2 years

Local Construction Cost Forecast

At least half of all construction projects in the region were put on hold in late March 2020 but most have restarted since. The market should remain stable while these projects are being completed and busier in a year or so.

See full report

Hover over the chart to see exact figures

Pipe Pricing

This chart shows the three-year trend of pipe pricing by hundredweight ($ per cwt). Polyvinyl Chloride Pipe, or PV, is used for pipes and fittings including transportation of drinking water, soil and waste, sewage and underground drainage. Reinforced concrete pipe, or RCP, is one of the standard materials used in storm sewer systems, sanitation systems, and large irrigation projects Ductile iron pipe is pipe made of ductile cast iron commonly used for potable water transmission and distribution.

Hover over the chart to see exact figures

Oil, Gas and Fuel

While fuel costs are a contributor to on site construction installation costs, their significance is much larger in the manufacture of raw materials that are in turn fabricated, delivered and made part of buildings. Even still, by themselves they only move the needle slightly on the overall cost of construction. However, these commodities have other indirect impacts on our economy and consumer confidence and continued significantly low fuel and oil costs, while good for the consumer, are not necessarily good for economic recovery.

Hover over the chart to see exact figures

Metals

This graph shows the three-year trend of key metals by price per pound (lb). Aluminum Zinc Copper Nickel

Hover over the chart to see exact figures

Lumber and Wood Products

This graph shows the three-year trend of key lumber and wood products in terms of producer price index. Plywood 2x4 S4S Common Lumber and Plywood

Hover over the chart to see exact figures

Concrete and Cement

December saw upward movement in the cost of precast concrete products as well as Ready-Mix Concrete with Precast at a 3-year high. We attribute some of these increases to what is similarly occurring now in the steel market: uncertainty in transportation costs, increased demand, as well as impacts to the manufacture efficiency from COVID-19.

Hover over the chart to see exact figures

Structural Steel Shapes and Rolled Bars

Iron and steel scrap rose sharply in December 2020. In late November 2020, overseas demand began putting upward price pressure on U.S. ferrous scrap supplies as governments around the world funded steel-intensive infrastructure plans. While the rising prices create the potential for a healthy margin for scrap processors, the bad news is that seasonal and public health factors are placing limits on the amount of scrap flowing into yards. Iron and steel scrap pricing are significant leading indicators in the eventual costs of fabricated steel products.

Hover over the chart to see exact figures

Asphalt Product Pricing

Paving Asphalt PG 58 is a Performance Graded (PG) asphalt derived from specially selected crude oils via carefully controlled refining processes. Paving Asphalt PG 58 product is recommended for road construction. Asphalt WPU058102 represents the Producer Price Index of Asphalt and Other Petroleum and Coal Products reported by the U.S. Bureau of Labor Statistics.

Hover over the chart to see exact figures

Gypsum, Drywall and Insulation

We reported in Q3 that the certain products, particular lumber, were seeing substantially increased costs and shortages, largely attributed to the sustaining, and in some locations booming, single family housing market as well as COVID’s impact on supply chain and supply chain logistics. As we finished Q4 2020 and moved into Q1 2021, we have begun to receive numerous pricing alerts from major steel mills including Nucor, Gerdau, Steel Dynamics, SSAB and others announcing increases in the pricing of numerous steel milled shapes (ranging from $30 per ton to in some cases more than $100 per ton). The mills are citing increased raw material costs, uncertainty in transportation, as well as increased demand as causes for the increased pricing. As a result of this, some projects have already begun to see impacts to project bids. While increased pricing can impact projects, they are also often an indicator of a strengthening construction market.

Construction Materials and Commodities Pricing

Asphalt

Piping

Lumber and Wood

Metals

Oil, Gas and Fuel

Drywall, Gypsum and Insulation

Concrete and Cement

Steel and Aluminum

Hover over the chart to see exact figures

Title of the Graphs

In August 2020, construction spending was estimated at a seasonally adjusted annual rate of $1,412.8 billion, 1.4% above the July estimate of $1,392.7 billion. The August figure is 2.5% above the August 2019 estimate of $1,379.0 billion. During the first eight months of this year, construction spending amounted to $927.7 billion, 4.2% above the $889.9 billion for the same period in 2019

Click on the chart to see exact figures

Pipe Pricing

Click on the chart to see exact figures

Oil, Gas and Fuel

While fuel costs are a contributor to on site construction installation costs, their significance is much larger in the manufacture of raw materials that are in turn fabricated, delivered and made part of buildings. Even still, by themselves, oil, gas and fuel only move the needle slightly on the overall cost of construction. However, these commodities have other indirect impacts on our economy and consumer confidence and continued significantly low fuel and oil costs, while good for the consumer, are not necessarily good for economic recovery.

Click on the chart to see exact figures

Metals

This graph shows the three-year trend of key metals by price per pound (lb). Aluminum Zinc Copper Nickel

Click on the chart to see exact figures

Lumber and Wood Products

This graph shows the three-year trend of key lumber and wood products in terms of producer price index. Plywood 2x4 S4S Common Lumber and Plywood

Click on the chart to see exact figures

Concrete and Cement

It is worth noting that some material price indicators will lag the market by several months as their supply and demand impacts are not felt on the cost index until there is a decline in need. As described earlier, some raw materials have increased between Q2 an Q3. We may still see an upward trend in materials thru Q4 as supply catches up with demand that was halted due to the pandemic. However given other economic trends, our thinking is that this is a short term impact likely to reverse in Q1 2021 if commercial demand remains recessed.

Click on the chart to see exact figures

Structural Steel Shapes and Rolled Bars

World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 156.2 million tonnes (Mt) in August 2020, a 0.6% decrease compared to August 2019. The U.S. produced 5.6 Mt of crude steel in August 2020, a decrease of 24.4% compared to August 2019. China produced 94.8 Mt of crude steel in August 2020, an increase of 8.4% compared to August 2019.

Click on the chart to see exact figures

Asphalt Product Pricing

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Praesent finibus in augue eget dictum. Praesent lobortis tempus finibus. In vel tincidunt leo. Nullam elementum dapibus dolor a pharetra. Curabitur interdum dolor ut sagittis vehicula. In porttitor mi sit amet ullamcorper auctor. Fusce vitae faucibus mauris. Suspendisse potenti.

Click on the chart to see exact figures

Gypsum, Drywall and Insulation

Connect with us

Visit our website

Click to download

Download the Skanska Q4 2020 Construction Market Trends, Costs and Pricing Report

Click on the chart to see exact figures

Skilled Labor Index and Common Labor Index

Overall construction uneployment rates fell to 7.1% in September from 7.6% in August. Construction employment increased by 26,000 in September, with growth in residential specialty trade contractors (+16,000) and construction of buildings (+12,000). Construction employment is below its February 2020 level by 394,000 employees.

Click on the chart to see exact figures

Architecture Billings Index

Click on the chart to see exact figures

Construction Cost, Building Cost and Material Price Index

Construction, Architecture and Labor Indices

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

Miami/ Ft. Lauderdale

Seattle

Portland

Orlando

Tampa

New Jersey

New York

Boston

Phoenix

Philadelphia

Washington D.C.

N.C / Virginia

Cincinnati

Atlanta

Nashville

Houston

Dallas

San Antonio

Los Angeles

San Francisco

Click on the map locations to see construction forecast details for a specific city or region.

Want to discuss the local market position and forecast? Connect with Andrew Rabasca, Regional Director of Preconstruction.

Phoenix, Arizona

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Want to discuss the local market position and forecast? Connect with Jeff Smoker, Vice President of Preconstruction in Ohio.

Cincinnati, Ohio

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Trade contractors are continuing to hold low margins in an effort to fill backlog. However, there is significant inflationary pressure in material pricing. We are expecting this to begin to drive trade contractor pricing higher (back to normal levels) once they have a comfort level that the market is stable. Indications are that we will see that pricing inflation begin in the next three to six months.

Want to discuss the local market position and forecast? Connect with Chris Hillyer, San Antonio Senior Vice President of Preconstruction.

San Antonio, Texas

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

The San Antonio market continues to be stable, competitive and yielding favorable pricing and bidding is expected to continue in the short term. K-12 bonds that were held off in 2020 due to COVID/election year are expected to start to see momentum to potentially be put to vote later this year. The higher education sector is waiting on what the state legislature will do with Tuition Revenue Bonds (TRBs) that help fund higher education projects and will impact the construction industry statewide.

Want to discuss the local market position and forecast? Connect with Linh Le, Houston Vice President of Preconstruction, Estimating and General Expenses.

Dallas, Texas

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Atlanta, Georgia

Want to discuss the local market position and forecast? Connect with Kayle Gastley,Senior Vice President of Preconstruction, Estimating General Expenses in Atlanta.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

The new project workload in Atlanta is slowing as project starts are still on hold and competition will drive down pricing for at least the next 6 months. After the presidential election, projects currently on hold are expected to move forward.

Houston, Texas

Want to discuss the local market position and forecast? Connect with Linh Le, Houston Vice President of Preconstruction, Estimating and General Expenses.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Nashville, Tennessee

Want to discuss the local market position and forecast? Connect with Dan Finch, Nashville Vice President of Preconstruction.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Los Angeles, CA

Want to discuss the local market position and forecast? Connect with Dan Haas, Preconstruction Director in Los Angeles.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

San Francisco, CA

Want to discuss the local market position and forecast? Connect with Michael Nelson, Preconstruction Director of Estimating General Expenses in San Francisco.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Portland, Oregon

Want to discuss the local market position and forecast? Connect with Steve Clem, Regional Senior Vice President of Preconstruction.

Local Insight and Commentary

Construction Cost Forecast Key

Market experiencing significant/abnormal construction price inflation (+5%)

Market is busy and construction price inflation is above normal (3 - 5%)

Market is stable and construction pricing/inflation is less than 3%

Market is recessed and construction pricing / inflation is flat or negative

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Seattle, Washington

Want to discuss the local market position and forecast? Connect with Alan Dunbar, Regional Director of Preconstruction.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Tampa, Florida

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Downtown Tampa is very busy with an ongoing large scale downtown development district. Labor is at a premium and will be for some time but overall is trending towards stability.

Miami / Ft. Lauderdale

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Several large projects are closing out, while several are on the horizon, the overall market seems to be leveling off as the boom in tower cranes for residential projects will eventually slow.

Orlando, Florida

Want to discuss the local market position and forecast? Connect with Jon Meese, Vice President of Preconstruction in Florida.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Orlando has become very competitive with the slow in work related to Disney and Universal. Overall the market continues to stay stable.

North Carolina / Virgina

Want to discuss the local market position and forecast? Connect with Will Senner, Vice President of Preconstruction in North Carolina and Virginia.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Many trade partners are still reducing margins in an effort to secure immediate backlog to fill in where other projects have been delayed. However, in many cases this is only enough to offset continued increases in key commodity prices and decreased labor efficiencies due to COVID 19 requirements. The preexisting labor shortages in local markets have also limited the extent of downward pressure on labor costs. The volume of work either on hold or in the pipeline is creating optimism for a potential rebound, however the pace of construction cost escalation will largely be dictated by how quickly the previously delayed projects move forward into construction.

Washington, D.C

Want to discuss the local market position and forecast? Connect with Apryl Webb, Vice President of Preconstruction, Estimating General Expenses in Washington, D.C.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Philadelphia, PA

Want to discuss the local market position and forecast? Connect with James Lane, Vice President of Preconstruction in Philadelphia.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

Boston, Massachusetts

Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, Estimating General Expenses in Boston.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

The pandemic has slowed inflation down from around 5% to under 3% mostly due to paused and delayed projects. The Life Science and Healthcare markets have seen continued construction activity throughout the last year but not at high enough levels to make up for losses in other market sectors. As the vaccine rolls out and restrictions are lifted, we anticipate the entire market will rebound with startups of previously delayed projects and new develoment. This will result in an increase in inflation to at least pre-pandemic levels if not more over the next couple of years.

New York, NY

Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Estimating General Expenses in New Jersey.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

New Jersey

Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Estimating General Expenses in New Jersey.

Local Insight and Commentary

Construction Cost Forecast Key

Next 6 months

Local Construction Cost Forecast

6 months - 1 year

1 - 2 years

At least half of all construction projects in the region were put on hold in late March but most have restarted since. The market should remain stable while these projects are being completed and busier in a year or so.

See full report

3. Decline in U.S. Construction

2. Lower Demand for Steel in 2021

1. Increase in Supplier Notices

As we close Q3 and enter Q4 of 2020, we have seen a series of supplier price increase notices, mostly for metal-based products. Here are the three key construction trends we see closing out 2020:

Our current conditions could be likened to 2008: competition will heighten amongst contractors which can often benefit project costs. From a cautionary perspective, this same elevated level in competition that can initially drive prices lower, often leads to downstream issues during construction such as more aggressive positions on claims against incomplete design and in some cases greater defaults and bond claims due to contractor failures.

3,586

Current Material Price Index

+1.3%

Change from Previous Month

Past one-year trend

Past three-year trend

11,499

Current Construction Industries Index

+1.7%

Change from Previous Month

Past one-year trend

Past three-year trend

$1.92

Current Fuel Price ($/gallon)

-16.5%

Change from Previous Month

Past one-year trend

Past three-year trend

$40.22

Current Oil Price ($/barrel)

-5.6%

Change from Previous Month

Past one-year trend

Past three-year trend

$147.82

Current Portland Cement ($ per CY)

-0.5%

Change from Previous Month

Past one-year trend

Past three-year trend

$186.71

Current Stainless Steel ($ per CWT)

-0.3%

Change from Previous Month

Past one-year trend

Past three-year trend

$762.17

Current Plywood Price ($ per MSF)

+7.6%

Change from Previous Month

Past one-year trend

Past three-year trend

$391.69

Current Asphalt PG 58 ($ per ton)

0.0%

Change from Previous Month

Past one-year trend

Past three-year trend

Asphalt

Plywood

Steel

Cement

Oil

Fuel

Materials Index

Construction Index

Construction Pricing Snapshot

Click an index or material to view details

3,791

Current Material Price Index

+5.7%

Change from previous quarter

Past one-year trend

Past three-year trend

11,626

Current Construction Industries Index

+1.1%

Change from previous quarter

Past one-year trend

Past three-year trend

$2.20

Current Fuel price ($/gallon)

+0.5%

Change from previous quarter

Past one-year trend

Past three-year trend

$48.52

Current Oil price ($/barrel)

+20.6%

Change from previous quarter

Past one-year trend

Past three-year trend

$146.82

Current Cement price ($ per CY)

-0.7%

Change from previous quarter

Past one-year trend

Past three-year trend

$53.60

Current Structural Steel Shapes Price ($ per CWT)

+0.8%

Change from previous quarter

Past one-year trend

Past three-year trend

$825.48

Current Plywood price ($ per MSF)

+8.3%

Change from previous quarter

Past one-year trend

Past three-year trend

$402.92

Current Asphalt PG 58 ($ per ton)

+2.9%

Change from previous quarter

Past one-year trend

Past three-year trend

Asphalt

Plywood

Steel

Cement

Oil

Fuel

Materials Index

Construction Index

Q4 Construction Pricing Snapshot

Click an index or material to view details

Asphalt

Plywood

Structural Steel

Cement

Oil

Fuel

Construction Index

Materials Index

Hover over the chart to see exact figures

Click the icons to view interactive three-year index or pricing trends.

Construction Index

Introduction

Forecast Map

Construction/Labor

Materials

Download Report

Gypsum products rebounded in Q3 2020 and continued at near one-year and three-year highs despite the global pandemic. As we indicated in Q3 2020, the strength of the residential construction market remains a catalyst for this trend in the U.S. Housing starts rose 1.2%, to 1.55 million annualized units, in November 2020 and total housing starts are 2.8% higher than a year ago.