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
Supply Chain Recovery and How to Plan
Seattle
Portland
Phoenix
Los Angeles
San Francisco
Miami/Ft. Lauderdale
Orlando
Tampa
New Jersey
New York
Connecticut
Philadelphia
Washington D.C.
North Carolina/
Virginia
Cincinnati
Atlanta
Nashville
Houston
Dallas
San Antonio
Seattle, WA
Local Insight and Commentary
Next 6 months
6 months - 1 year
1 - 2 years
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 and 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 in Seattle.
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
The pandemic upended the construction industry. While some provider margins shrank early on, prices have steadily and dramatically risen, primarily as a result of the impact of the pandemic on all parts of the construction supply chain. As vaccines are rolled out and stimulus checks and infrastructure proposals pump money back into the economy, prices are expected to rise until supply chain capacity is back to pre-pandemic levels. With GDP on pace to regain its pre-pandemic trajectory by 2022, and the American Institute of Architects’ Billings Index back to pre-pandemic health, there are few signs that the commercial construction recovery will lose momentum.
While each local market is different, we recommend including elevated cost escalation in near-term plans until we return to pre-pandemic supply chain output and transportation levels, at least through Q3 and perhaps longer. Lead times on many goods are also expected to be lengthy, emphasizing the need to adjust purchasing plans and order early.
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
Q1 2021
Construction Market
Trends, Pricing and Costs
Construction, Architecture and Labor Indices
Local Construction Cost Forecast
Construction Cost Forecast Key
Connect with us
Visit our website
Visit our website
Click to download
Click to download
Download the full Skanska USA Building Q1 2021 Construction Market Trends, Costs and Pricing Report
Portland, OR
Market is stable, but uncertainty about the timing and strength of a pending economic rebound continues to obscure near-term forecasts.
Want to discuss the local market position and forecast? Connect with Steve Clem, Regional Senior Vice President of Preconstruction in Portland.
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
The San Francisco Bay Area construction market is recovering faster than some may have expected. Life sciences, healthcare, mission critical, and higher education markets lead the way. Construction material prices are escalating at unusually high rates, with the suppliers working to keep up with increased demand. Materials impacted include lumber, steel, metal studs, and several others. Labor market utilization is also growing, as many projects make their way to the bidding market.
Want to discuss the local market position and forecast? Connect with Mike Nelson, Preconstruction Director 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
Local market experienced significant price increases in materials in the first quarter of 2021. Shortage of skilled labor is anticipated to be a driver for price increases for new healthcare and education projects in the next year. The education market is being driven by bonds authorized in the previous funding cycle. New projects associated with the 2028 Olympics will likely start within the next two years and may affect costs.
Starts for commercial and large multi-family projects are projected to be flat or slightly decreased for the next year. California expects to reopen most COVID affected businesses by June of 2021.
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, AZ
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
Recent bid projects have experienced significant escalation, particularly within steel/metals and plastics/PVC commodities. We have letters from manufacturers, via our bidders, that indicate anywhere from a 5 to 15 percent increase, and additional increases forthcoming (anywhere from another 5 to 15 percent in the second quarter of this year or by May 1, 2021).
San Antonio, TX
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 and competitive but recent commodity increases are starting to impact pricing.
K-12 bonds will see some momentum again later this year and the higher education sector is waiting on what state legislature will do with Tuition Revenue Bonds (TRBs) that help fund higher education projects. This will impact the construction industry statewide.
Local Insight and Commentary
Dallas, TX
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
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, generally resulting in a favorable pricing environment. However, commodity increases are impacting construction pricing.
Houston, TX
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
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
Oil pricing has seen a slight recovery, but not enough to trigger major construction recovery in the Houston market. Competition on public bid projects is enhanced as companies look to build backlog for the second half of 2021, but commodities continue to increase and construction pricing has been impacted.
Nashville, TN
Want to discuss the local market position and forecast? Connect with Adam Hicks, Vice President in Nashville.
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
Pricing in Nashville has steadied compared to the first quarter increases that were caused mainly by increases in steel pricing. There appears to be enough work to fill subcontractor pipelines and backlogs in the near future, keeping the future pricing trends stable. In the next one to two years, Nashville is still expecting a lot of new project starts and continued development, which may cause the market to heat back up, over and above its current levels.
Cincinnati, OH
The market is currently experiencing significant inflationary price pressure that is forcing subcontractors to increase prices. We are also beginning to experience material shortages with allocation on many critical building supplies.
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, GA
We are experiencing escalation on structural steel, reinforcing steel, metal studs, wood and resin products, to name a few. The pricing seems to be tied to pent-up demand and factory shut downs during the past year due to the pandemic and weather interruptions on the Gulf Coast. The material escalaton noted above has spilled over into major MEP equipment as well. Demand is affecting cost, as well as lead times. There is currently no horizon for this activity.
Want to discuss the local market position and forecast? Connect with Kayle Gastley,
Senior Vice President of Preconstruction 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, FL
We are experiencing escalation on structural steel, reinforcing steel, metal studs, concrete and major MEP equipment. We expect normal escalation and deliveries to return to pre-pandemic levels as supply and demand return to normal in a year or two, as the vaccine rollout continues and restrictions are lifted.
Want to discuss the local market position and forecast? Connect with Jeff Courtney, Preconstruction Manager in Tampa.
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
The construction volume remained constant through 2020, with an increase in the first quarter of 2021. The overall market is being affected by the current residential market demand (due to an influx of new residents in South Florida) that is expected to stabilize after 2021. Material price increases in steel, drywall, wood/lumber and copper has affected overall prices as well. The healthcare sector is expected to continue to grow through 2021, while commerical and education continue to improve at a slower pace.
Want to discuss the local market position and forecast? Connect with Diego Espinosa, Preconstruction Manager in South 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, FL
We are experiencing escalation on structural steel, reinforcing steel, metal studs, concrete and major MEP equipment. Large projects are coming off hold and starting construction at local theme parks which will keep local subcontractors busy for the next few years.
Want to discuss the local market position and forecast? Connect with Brian Coakley, Director of Preconstruction in Orlando.
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 projects that were paused due to COVID have
now restarted and are pushing towards bid dates later this year.
While some trade partners are still aggressively pursuing work with low bids, filling an immediate hole in their backlog, this cost advantage has been overcome by abnormal commodity escalation in the near term. Meanwhile, pricing on work further out is becoming less aggressive as optimism rises for a strong rebound in construction activity.
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 D.C. Market is currently busy. Several projects that were previously pushed due to COVID are now being put on the street for pricing. We are still seeing an increase in office space vacancy around 15 percent up from the normal range of five to ten percent. Because of this, there has 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.
Want to discuss the local market position and forecast? Connect with Apryl Webb, Vice President of Preconstruction, 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
The Philadelphia market is being hit like most regions with a large amount of pricing increases on raw materials. We are starting to see more projects released to the market, and healthcare has increased along with a big push for life sciences in our region.
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/New England
During the pandemic, inflation slowed down to under three percent for 2020, mostly due to paused and delayed projects. 2021 has seen many different factors in play: selective material shortages, competition for backlog, and steel and gasoline price increases. This combination has resulted in a near normal escalation rate between three and five percent over the next two years.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, 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, Metro New York/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
The next six months will see a lot of activity with
major projects coming out in the transportation/
infrastructure sectors. Healthcare will remain strong
through out the year and beyond.
New Jersey
Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Metro New York/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
Increased material prices for metals, lumber, roofing and ceiling tiles are being moderately offset by aggressive bidding from subcontractors that are looking to recoup losses caused by the pandemic. Price inflation may not recess to stable levels for another year or two.
See full report
Hover over the chart to see exact figures
Pipe Producer Price Index
This chart shows a one-year trend of pipe producer price index.
Polyvinyl Chloride (PVC) Pipe
Weather related capacity disruptions in the Gulf Coast region resulted in doubling of PVC resin costs.
Copper Pipe
Worldwide manufacturing demand and reduced supply has pushed COMEX copper above $4 per pound.
Carbon Steel Pipe
Reduced mill capacity, scheduled mill outages and increasing demand continues to drive up prices.
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 and transportation of raw and fabricated materials that are in turn delivered and made part of buildings.
Although fuel costs only move the needle slightly on the overall cost of construction, their recent increases have been passed on to consumers by way of increased transportation and logistics costs. As the costs of fuel and oil have been on the increase, so has the global economy.
Hover over the chart to see exact figures
Metals
This graph shows a one-year trend of key metals by price per pound (lb).
Aluminum
Quick return of demand is far outpacing the ability of producers to increase supply.
Hover over the chart to see exact figures
Lumber and Wood Products
Early in the pandemic, lumber mills were taken off-line when demand was expected to continue to drop. When residential construction took off, the industry was caught off guard and struggled to bring capacity back on-line quickly enough. The end result is the steep inflation curve you see here. As compared to a year ago, lumber and plywood pricing has increased over 150 percent. Residential construction is the main driver for lumber pricing. As we enter the spring season, we will keep a close eye on new construction starts, which tend to increase this time of year.
Hover over the chart to see exact figures
Concrete and Cement
Q1 saw continued upward movement in the cost of cement and derivative products, such as concrete and precast concrete, with precast at an all time. Cement prices, which were mostly flat in 2020 are making up for that plateau in 2021 as the commercial construction market rebounds.
Hover over the chart to see exact figures
Structural Steel Shapes and Rolled Bars
Structural steel and other metal product prices rose sharply in Q4 and continued to climb in Q1, albeit at a lesser pace.
The issue remains of rebuilding capacity to produce at the rate of demand. Numerous factors, from raw material availability to manufacturing changes resulting from social distancing practices during the pandemic, have contributed to the increased pricing on construction projects. The visual depicts unfabricated, uninstalled raw material costs only.
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
The last two quarters have been as volatile as the scrap metal crisis in 2007, the recession in 2008/2009 and the recovery period that followed. The producer price index in lumber has nearly doubled in one year and steel prices on select shapes/rollings have also nearly doubled. Commodities such as carbon steel piping, copper tubing and fittings, PVC piping and fittings and electric wire are on the rise and show no signs of slowing down.
The commercial construction market has been regaining momentum, but is not back to pre-pandemic levels. However, its demands are exceeding the supply chains' abilities. Not unlike the last quarter of 2020, Q1 2021 increases are primarily due to supply issues related to raw materials, manufacturing and fabrication supply chain team members working to reestablish their pre-pandemic capacities to produce.
Construction Materials and Commodities Pricing
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. Click the icons to view three-year index or pricing trends.
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 $889.9 billion for the same period in 2019
Click on the chart to see exact figures
Pipe Pricing
This chart shows the three-year trend of pipe pricing by hundredweight ($ 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.
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
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Click on the chart to see exact figures
Gypsum, Drywall and Insulation
Connect with us
Visit our website
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Click to download
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Download the Skanska Q1 2021 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
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
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. Carolina/ 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, AZ
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
Recent bid projects have experienced significant escalation, particularly within steel/metals and plastics/PVC commodities. We have letters from manufacturers, via our bidders, that indicate anywhere from a 5 to 15 percent increase, and additional increases forthcoming (anywhere from another 5 to 15 percent in the second quarter of this year or by May 1, 2021).
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
The market is currently experiencing significant inflationary price pressure that is forcing subcontractors to increase prices. We are also beginning to experience material shortages with allocation on many critical building supplies.
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 and competitive but recent commodity increases are starting to impact pricing.
K-12 bonds will see some momentum again later this year and the higher education sector is waiting on what state legislature will do with Tuition Revenue Bonds (TRBs) that help fund higher education projects. This will impact the construction industry statewide.
Want to discuss the local market position and forecast?
Connect with Linh Le, Vice President of Preconstruction in Texas.
Dallas, Texas
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
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, generally resulting in a favorable pricing environment. However, commodity increases are impacting construction pricing.
Atlanta, GA
Want to discuss the local market position and forecast? Connect with Kayle Gastley, Senior Vice President of Preconstruction in Atlanta.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
We are experiencing escalation on structural steel, reinforcing steel, metal studs, wood and resin products, to name a few. The pricing seems to be tied to pent-up demand and factory shut downs during the past year due to the pandemic and weather interruptions on the Gulf Coast. The material escalaton noted above has spilled over into major MEP equipment as well. Demand is affecting cost, as well as lead times. There is currently no horizon for this activity.
Houston, Texas
Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
Oil pricing has seen a slight recovery, but not enough to trigger major construction recovery in the Houston market. Competition on public bid projects is enhanced as companies look to build backlog for the second half of 2021, but commodities continue to increase and construction pricing has been impacted.
Nashville, TN
Want to discuss the local market position and forecast? Connect with Adam Hicks, Vice President in Nashville.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
Pricing in Nashville has steadied compared to the first quarter increases that were caused mainly by increases in steel pricing. There appears to be enough work to fill subcontractor pipelines and backlogs in the near future, keeping the future pricing trends stable. In the next one to two years, Nashville is still expecting a lot of new project starts and continued development, which may cause the market to heat back up, over and above its current levels.
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
Local market experienced significant price increases in materials in the first quarter of 2021. Shortage of skilled labor is anticipated to be a driver for price increases for new healthcare and education projects in the next year. The education market is being driven by bonds authorized in the previous funding cycle. New projects associated with the 2028 Olympics will likely start within the next two years and may affect costs.
Starts for commercial and large multi-family projects are projected to be flat or slightly decreased for the next year. California expects to reopen most COVID affected businesses by June of 2021.
San Francisco, CA
Want to discuss the local market position and forecast? Connect with Michael Nelson, Preconstruction Director 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
The San Francisco Bay Area construction market is recovering faster than some may have expected. Life sciences, healthcare, mission critical, and higher education markets lead the way. Construction material prices are escalating at unusually high rates, with the suppliers working to keep up with increased demand. Materials impacted include lumber, steel, metal studs, and several others. Labor market utilization is also growing, as many projects make their way to the bidding market.
Portland, OR
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
Market is stable, but uncertainty about the timing and strength of a pending economic rebound continues to obscure near-term forecasts.
Seattle, WA
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
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.
Tampa, FL
Want to discuss the local market position and forecast? Connect with Jeff Courtney, Preconstruction Manager in Tampa.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
We are experiencing escalation on structural steel, reinforcing steel, metal studs, concrete and major MEP equipment. We expect normal escalation and deliveries to return to pre-pandemic levels as supply and demand return to normal in a year or two, as the vaccine rollout continues and restrictions are lifted.
Miami/Ft. Lauderdale
Want to discuss the local market position and forecast? Connect with Jon Meese, Preconstruction Manager in South Florida.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
The construction volume remained constant through 2020, with an increase in the first quarter of 2021. The overall market is being affected by the current residential market demand (due to an influx of new residents in South Florida) that is expected to stabilize after 2021. Material price increases in steel, drywall, wood/lumber and copper has affected overall prices as well. The healthcare sector is expected to continue to grow through 2021, while commerical and education continue to improve at a slower pace.
Orlando, FL
Want to discuss the local market position and forecast? Connect with Brian Coakley, Director of Preconstruction in Orlando.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
We are experiencing escalation on structural steel, reinforcing steel, metal studs, concrete and major MEP equipment. Large projects are coming off hold and starting construction at local theme parks which will keep local subcontractors busy for the next few years.
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 projects that were paused due to COVID have
now restarted and are pushing towards bid dates later this year.
While some trade partners are still aggressively pursuing work with low bids, filling an immediate hole in their backlog, this cost advantage has been overcome by abnormal commodity escalation in the near term. Meanwhile, pricing on work further out is becoming less aggressive as optimism rises for a strong rebound in construction activity.
Washington, D.C
Want to discuss the local market position and forecast? Connect with Apryl Webb, Vice President of Preconstruction, 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
The D.C. Market is currently busy. Several projects that were previously pushed due to COVID are now being put on the street for pricing. We are still seeing an increase in office space vacancy around 15 percent up from the normal range of five to ten percent. Because of this, there has 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.
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
The Philadelphia market is being hit like most regions with a large amount of pricing increases on raw materials. We are starting to see more projects released to the market, and healthcare has increased along with a big push for life sciences in our region.
Boston/New England
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction in Boston.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
During the pandemic, inflation slowed down to under three percent for 2020, mostly due to paused and delayed projects. 2021 has seen many different factors in play: selective material shortages, competition for backlog, and steel and gasoline price increases. This combination has resulted in a near normal escalation rate between three and five percent over the next two years.
New York, NY
Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Metro New York/New Jersey.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
The next six months will see a lot of activity with
major projects coming out in the transportation/
infrastructure sectors. Healthcare will remain strong
through out the year and beyond.
New Jersey
Want to discuss the local market position and forecast? Connect with John Tamborino, Vice President of Preconstruction, Metro New York/New Jersey.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
Increased material prices for metals, lumber, roofing and ceiling tiles are being moderately offset by aggressive bidding from subcontractors that are looking to recoup losses caused by the pandemic. Price inflation may not recess to stable levels for another year or two.
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.
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.
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.
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
3,917
Current
Material Price Index
+3.3%
Change from previous quarter
Past one-year trend
Past three-year trend
11,780
Current Construction Industries Index
+1.1%
Change from previous quarter
Past one-year trend
Past three-year trend
$2.81
Current
Fuel price ($/gallon)
+28%
Change from previous quarter
Past one-year trend
Past three-year trend
$59.16
Current
Oil price
($/barrel)
+21.9%
Change from previous quarter
Past one-year trend
Past three-year trend
$151.10
Current
Cement price
($ per CY)
+2.9%
Change from previous quarter
Past one-year trend
Past three-year trend
$1,132
Current standard plate price
($ per net ton)
+19%
Change from previous quarter
Past one-year trend
Past three-year trend
$931.11
Current
Plywood price
($ per MSF)
+12.8%
Change from previous quarter
Past one-year trend
Past three-year trend
$408.72
Current
Asphalt PG 58
($ per ton)
+1.4%
Change from previous quarter
Past one-year trend
Past three-year trend
Asphalt
Plywood
Steel
Cement
Oil
Fuel
Materials Index
Construction Index
Q1 Construction Pricing Snapshot
Click an index or material to view details
Asphalt
Plywood
Standard Plate
Cement
Oil
Fuel
Construction Index
Materials Index
Click the icons to view interactive one-year index or pricing trends.
Construction Index
Construction Index
Construction Index
Construction Index
Construction Index
Construction Index
Construction Index
Introduction
Forecast Map
Construction/Labor
Materials
Download Report
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Click the icons to view one-year index or pricing trends.
Gypsum products continue to ride the single-family residential housing wave through Q1 and are still at three-year highs despite the global pandemic. As we indicated in Q4 2020, the strength of the residential construction market remains a catalyst for this trend. Despite the U.S. housing start rate having peaked in December of 2020 at an annualized rate of 1.67 million units, the current rate as of February is still almost 40 percent higher at 1.421 million units, compared to this time one year ago. This reduction off peak start rates in December could be in part due to the price increases related to lumber, gypsum and other materials as well as creeping interest rates.
Supply Chain
Supply Chain Trends
To learn more about supply chain trends, reach out to Tom Park or Rob Cantando.
Skanska’s Strategic Supply Chain 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. Since the outbreak of COVID-19, we have been working with our partners to closely monitor construction supply chain disruptions, lead times and impacts to market prices for materials and equipment.
Most supply chains have recovered from the initial impact of COVID-19; however, the main factor currently stressing supply chains is surging demand. Most notable has been the continued surge in residential building. In addition, certain segments of commercial construction are also seeing very high levels of activity, such as data centers and warehousing and distribution. Some of the supply chain categories that are being stressed the most by high levels of demand include steel, wood products, drywall and mechanical/electrical equipment.
There have also been challenges presented by disruptions to refineries and petrochemical production along the Gulf Coast brought on by the hurricanes and more recently, unprecedented cold weather. The February freeze and associated power outages caused almost 80 percent of petrochemical production in the Gulf region to go offline. Effects of the shutdown have severely limited the supply of petrochemical products, which are prime ingredients in PVC conduit, PVC piping, epoxy resin benchtops, and other products. Lastly, the challenges in transportation continue to negatively impact the supply chain – from a shortage of shipping containers, to capacity constrained ports of entry, to rising fuel prices.
Lead Time
Price
COVID-19 PPE
Plumbing
Elevators, escalators, moving walks
Appliances
Lab Casework and Fume Hoods
Wood-based Building Materials
Architectural Interiors
Structural Steel
Lead time and Price Snapshot
Click a category to view details
Building Control systems
Electrical Gear
Electrical commodity Materials
Lighting
COVID-19 PPE
HVAC Equipment
Lead times for most PPE have stabilized. With the exception of nitrile gloves, disposable coveralls and disinfecting wipes, supply has caught up with demand, and prices have reduced. One major concern is rampant fraud with KN95 masks not meeting specifications. Reputable sources are strongly recommended.
Steel pricing has increased significantly over the last nine months as supply could not keep up with demand. There is some evidence of pricing starting to plateau, but at a very elevated level.
Lead Time
Price
Structural Steel
Drywall supply continues to be allocated, resulting in significantly increased lead times. Regular, repeated price increases for drywall and metal studs have driven pricing up 50 percent in the last nine months. The increased pricing and extended lead times are being driven by increased residential demand.
Lead Time
Price
Architectural Interiors
Ceilings, drywall, metal studs, flooring, paint, etc.
Manufacturers are feeling the impact of increased steel pricing and are starting to pass on increases to customers. Resin supply (for bench tops) is very tight and is starting to threaten delivery timing.
Lead Time
Price
Lab Casework and Fume Hoods
A reduction in mill capacity at the start of the pandemic, coupled with a fast recovery in demand, has increased lead times and prices to their highest levels in the last four years. Since the start of 2021, lumber is up 12-18 percent and plywood is up 50+ percent. The lumber market is driven by residential construction which continues at a very high level and does not show signs of slowing down at this time. It remains to be seen if rising interest rates and construction costs will slow down construction demand over the next two quarters.
Click for further analysis
Lead Time
Price
Wood-based Building Materials
Demand for appliances continues to be very high. Some manufacturers are sold out for over five weeks. Relief is not expected until late in 2021. Prices are expected to rise over the next 6-12 months by at least three to five percent. According to some manufacturers, order backlogs are at the same level they were in Q3 of 2020.
Lead Time
Price
Appliances
Overall price and lead time for this category is expected to remain flat for the next six months. Demand for is at or approaching pre-pandemic levels. Price declines have leveled off.
Lead Time
Price
Elevators, Escalators, Moving Walks
Transportation and commodity costs are rising significantly, causing price increases across all pipe, valves, fittings, and plumbing fixtures. Copper, steel, and PVC prices, specifically, have increased significantly. Reasons for rising prices vary: copper is the result of increased demand in global manufacturing, steel is driven by higher demand and reduced mill capacity and PVC remains elevated due to further weather disruptions at petrochemical plants along the Gulf Coast.
Lead Time
Price
Plumbing
Overall demand is up, factory orders are almost at pre-pandemic levels. Business has rebounded, driven by reopening of schools and improving indoor air quality. Manufacturing costs have increased due to commodity price increases, factory inefficiencies, transportation surcharges and labor.
Lead Time
Price
HVAC Equipment
Overall price and lead time for controls is expected to remain flat over the next several months.
Lead Time
Price
Building Control Systems
Lead times and pricing have increased and are expected to increase, driven partially by data center construction. Busway lead times are 22 weeks. General price increases of 5-15 percent have been announced for most commercial and industrial products.
Lead Time
Price
Electrical Gear
Commodities including wire are seeing price escalation. Products made with copper and PVC are the biggest concerns for electrical, due to extended lead times. Some products such as outlet boxes, steel fittings and struts will see price increases of 15-25 percent.
Lead Time
Price
Electrical Commodity Materials
While lead times have remained stable, several manufactures have announced price increases of four to eight percent effective late Q1. Transportation costs are expected to rise. Business is steady.
Lead Time
Price
Lighting
Status Key
Stable/Consistent
Trending Down
Fluctuating
Trending Up
Supply Chain
Hover over the chart to see exact figures
Skilled Labor Index and Common Labor Index
Overall construction unemployment rates fell to 8.6% in March 2021 from 9.6% in December 2020.
Construction added 110,000 jobs in March 2021, but employment in the industry is 182,000 jobs below its February 2020 level. Employment in Q1 increased in nonresidential specialty trade contractors and in heavy and civil engineering construction.
Hourly wages rose from $32.09 in December
2020 to $32.16 in February 2021.
Architecture Billings Index
Hover over the chart to see exact figures
This Architecture Billings Index (ABI) demonstrates whether or not architectural firms are billing for or signing new design contracts.
Hover over the chart to see exact figures
Construction Cost and Material Price Index
Construction spending during February 2021 was estimated at a seasonally adjusted annual rate of $1,516.9 billion, 0.8% below the revised January estimate of $1,529.0 billion.
The February figure is 5.3% above the February 2020 estimate of $1,441.1 billion.
During the first two months of this year, construction spending amounted to $213.2 billion, 4.9% above the $203.2 billion for the same period in 2020.
-50 =50 50+
Decrease in volume
Increase in volume
Neutral
Scoring:
Wood Products
Wood based products (lumber and panels) price points continue to escalate steeply. Review of wood products composite pricing indicates that framing lumber through March of this year is up 18 percent and plywood is up 53 percent from where they finished out the year in December 2020. In addition, when comparing price points to a year ago, lumber is up 150 percent and plywood is up 130 percent. Pricing is driven mainly by housing starts, which peaked in December of 2020 at 1.67 million units and have cooled slightly to 1.42 million units in February. However, spring is typically very strong for housing. Pricing is expected to stay elevated in the short term. We anticipate that rising interest rates will start to put pressure on home financing, helping to cool this market down.
Steel
Steel has escalated dramatically since August 2020. Pricing has increased in response to surging demand in two main sectors – distribution/warehousing and data centers. Since August, hot rolled steel pricing has increased from $440/ton to nearly $1,200/ton in February 2021, a 173 percent increase. However, increases appear to be slowing and some analysts are predicting a peak sometime in Q1 or Q2 of this year. Another important factor to be aware of is lead times, which have more than doubled from some mills. Elevated pricing is expected to remain, with easing starting after mid-year.
Drywall
Drywall pricing has escalately steeply over the last nine months. The surge in residential building is driving very high demand and manufacturers are struggling to keep pace. Most manufacturers are now supplying into the market on “allocation” or "controlled distribution". This is stretching out lead times. Overall, drywall pricing has increased approximately 50 percent over the last nine months. Housing continues to operate at escalated levels, however, price increase announcements have slowed. Pricing going forward will, very much, depend on housing activity this spring. While pricing is not expected to decrease in the near term, it may stabilize over the next two quarters.
Petrochemicals in PVC
Petrochemical manufacturers in the Gulf Region account for 80 percent of U.S. production, and their products are primary ingredients for PVC. Over the past year, production has been disrupted by a series of complications ranging from explosions, Hurricane Laura, and most recently winter storm Uri. Ultimately, 80 percent of the petrochemical production in the U.S. was impacted. As a result, the lost production is estimated to reduce total output for 2021 by 10-12 percent. Production is ramping back up, but there are still some raw material constraints; however, most of the operational issues are expected to be mitigated by the end of April. Prices of PVC have increased rapidly as well, and large distributors have implemented price increases of around ten percent in February, followed by another five to ten percent increase in April.
Mechanical and HVAC Equipment
Commercial HVAC equipment manufacturers saw a significant decline in factory orders in the last quarter of 2020 due to a 28 percent drop in nonresidential building starts compared to one year ago. This drop was a direct result of the pandemic which caused sharp declines in revenue in the healthcare, aviation, and hospitality sectors putting doubt in project pro formas. Concurrent with the decline in HVAC, equipment orders, steel, copper and transportation saw sharp increases in prices driven largely by a spike in demand for residential and consumer products. With commercial HVAC demand down, manufacturers resisted passing on price increases that they were experiencing with commodities within the manufacture of their equipment, so as not to further reduce demand on their factories. Since January, however, commercial projects began coming off hold and new projects emerged looking to improve indoor air quality in offices, at universities and K-12 public schools. As a result, demand for HVAC equipment is now approaching pre-pandemic levels. Further evidence of this increasing demand is recently announced price increases by most HVAC equipment manufacturers and products, in the range of three to five percent. Given the increased amount of commercial activity we are seeing, The Recovery Act, the pending infrastructure bill, and more schools opening as the vaccine distribution increases, we expect demand for HVAC equipment will continue to increase significantly over the next two quarters making further price and lead time increases likely.
Electrical Gear and Materials
All major electrical gear manufacturers have announced significant price increases and are running their factories at maximum capacity. First quarter output is expected to be at the highest levels in more than 12 months. The increased demand is particularly strong in the 600v and lower product range. Production of electrical busway is constrained due to increased demand from data centers and other industrial applications. Lead times for busway are pushing greater than 22 weeks in some cases. Medium voltage switch gear lead time has increased to 22-26 weeks, and unit substations have increased to 16-18 weeks. In addition to the increased demand, commodity prices for steel, aluminum, and copper continue to rise resulting in 10+ percent price increase for electrical gear and 15-25 percent for electrical materials such as outlet boxes, fittings, strut, wire, etc. As economic stimulus takes hold and more commercial projects start, we expect the increased demand for electrical gear and material will cause price and lead time to be significantly higher over the next two quarters.
Transportation
The majority of world trade is dependent on shipping containers. Market demand for goods in the U.S. is high, and ports are currently heavily congested with increased shipments. Starting in summer of last year the volume of shipments arriving in the U.S. began increasing steadily due to consumer demand, with most of the imports originating from Asia. At the same time that imports into the U.S. were rising, return shipments back to Asia were down, resulting in an uneven movement of trade, which ultimately created a severe imbalance of available shipping containers. The spot price for shipping a container from Asia to U.S. has risen from $1,200 to over $6,000 in the past few months. In an effort to meet demand for exports, manufacturers in Asia scaled up container production, but even with factories running extra shifts, there is still a shortage. It is expected that the prices for shipping stay high for at least the next quarter, but the supply crunch will likely last through the end of the year.
In addition to limited supply of containers, there is a severe labor shortage at the ports, which is still primarily COVID related, due to positive cases among port workers and social distancing requirements. Cargo volume has been high for the past six months as consumer spending has been focused on physical goods, resulting in a heavy demand for truck shipments. The ports and terminals are facing high levels of congestion which has been heightened by a lack of chassis to transport the containers, both by rail and truck once they are off the ships. Fuel prices have been rising as well, due to OPEC limiting production, refinery outages in the Gulf, and increased demand. As a result, fuel surcharges are increasing.
Transportation
The spot price for shipping a container from Asia to the U.S. has risen from $1,200 to over $6,000 in the past few months due to a container shortage. It is expected that the prices for shipping stay high for at least the next quarter, but the supply crunch will likely last through the end of the year.
Fuel prices have been rising as well, due to OPEC limiting production, refinery outages in the Gulf, and increased demand. As a result, fuel surcharges are increasing.
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Transportation
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Gypsum products continue to ride the single-family residential housing wave through Q1 and are still at three-year highs despite the global pandemic. As we indicated in Q4 2020, the strength of the residential construction market remains a catalyst for this trend. Despite the U.S. housing start rate having peaked in December of 2020 at an annualized rate of 1.67 million units, the current rate as of February is still almost 40 percent higher at 1.421 million units, compared to this time one year ago. This reduction off peak start rates in December could be in part due to the price increases related to lumber, gypsum and other materials as well as creeping interest rates.
Asphalt pricing is creeping up primarily due to the increasing costs of petroleum and the impacts to its manufacture, which are a result of the pandemic.
This graph shows a one-year trend of key lumber and wood products in terms of producer price index.
In February 2021, architecture firm billings returned to positive territory for the first time since the start of the pandemic one year ago with the AIA’s Architecture Billings Index (ABI) score climbing to a score of 53.3.
Firms located in the South region of the country reported billings growth for the second consecutive month in February, while firms located in the West and Midwest saw only small declines and look likely to return to growth soon themselves. Conditions remained softest at firms located in the Northeast, but the pace of the decline in firm billings slowed for the third month in a row.
The construction industry feels the impact of this index with a 9 to 12 month lag time.
Asphalt pricing is creeping up primarily due to the increasing costs of petroleum and the impacts to its manufacture, which are a result of the pandemic
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.
This graph shows the three-year trend of key lumber and wood products in terms of producer price index.
Lead times for most PPE have stabilized. With the exception of nitrile gloves, disposable coveralls and disinfecting wipes, supply has caught up with demand, and prices have reduced. One major concern is rampant fraud with KN95 masks not meeting specifications. Reputable sources are strongly recommended.
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COVID-19 PPE
Steel pricing has increased significantly over the last 9 months as supply could not keep up with demand. There is some evidence of pricing starting to plateau, but at a very elevated level.
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Structural Steel
Drywall supply continues to be allocated, resulting in significantly increased lead times. Regular, repeated price increases for drywall and metal studs have driven pricing up 50 percent in the last 9 months. The increased pricing and extended lead times are being driven by increased residential demand.
Ceilings, drywall, metal studs, flooring, paint, etc.
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Architectural Interiors
A reduction in mill capacity at the start of the pandemic, coupled with a fast recovery in demand, has increased lead times and prices to their highest levels in the last four years. Since the start of 2021, lumber is up 12-18 percent and plywood is up 50+ percent. The lumber market is driven by residential construction which continues at a very high level and does not show signs of slowing down at this time. It remains to be seen if rising interest rates and construction costs will slow down construction demand over the next two quarters.
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Wood-based Building Materials
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Manufacturers are feeling the impact of increased steel pricing and are starting to pass on increases to customers. Resin supply (for bench tops) is very tight and is starting to threaten delivery timing.
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Lab Casework and Fume Hoods
Demand for appliances continues to be very high. Some manufacturers are sold out for over five weeks. Relief is not expected until late in 2021. Prices are expected to rise over the next 6-12 months by at least three to five percent. According to some manufacturers, order backlogs are at the same level they were in Q3 of 2020.
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Appliances
Overall price and lead time for this category is expected to remain flat for the next six months. Demand for is at or approaching pre-pandemic levels. Price declines have leveled off.
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Elevators, Escalators, Moving Walks
Transportation and commodity costs are rising significantly, causing price increases across all pipe, valves, fittings, and plumbing fixtures. Copper, steel, and PVC prices, specifically, have increased significantly. Reasons for rising prices vary: copper is the result of increased demand in global manufacturing, steel is driven by higher demand and reduced mill capacity and PVC remains elevated due to further weather disruptions at petrochemical plants along the Gulf Coast.
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Plumbing
Overall demand is up, factory orders are almost at pre-pandemic levels. Business has rebounded, driven by reopening of schools and improving indoor air quality. Manufacturing costs have increased due to commodity price increases, factory inefficiencies, transportation surcharges and labor.
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HVAC Equipment
Overall price and lead time for controls is expected to remain flat over the next several months.
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Building Control Systems
Lead times and pricing have increased and are expected to increase, driven partially by data center construction. Busway lead times are 22 weeks. General price increases of 5-15% have been announced for most commercial and industrial products.
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Electrical Gear
Commodities including wire are seeing price escalation. Products made with copper and PVC are the biggest concerns for electrical, due to extended lead times. Some products such as outlet boxes, steel fittings and struts will see price increases of 15-25%.
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Electrical Commodity Materials
While lead times have remained stable, several manufactures have announced price increases of 4-8% effective late Q1. Transportation costs are expected to rise. Business is steady.
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Lighting
COVID-19 PPE
Structural Steel
Architectural Interiors
Lab Casework and Fume Hoods
Appliances
Elevators, escalators, moving walks
Wood-based Building Materials
Plumbing
HVAC Equipment
Building Control systems
Electrical commodity Materials
Lighting
Electrical Gear
Lead time and Price Snapshot
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Want to discuss the local market position and forecast? Connect with Linh Le, Vice President of Preconstruction in Texas.
Zinc
Prices leveled off recently as China continues to increase production.
Copper
Increased demand from manufacturing with reduced supply from South America causing price escalation.
Nickel
Prices are in correction as a result of increased supply coming from THG in China. Demand remains strong.
Want to discuss the local market position and forecast?
Connect with Linh Le, Vice President of Preconstruction in Texas.
Previous reports
Previous reports
Previous Market Trends, Costs and Pricing Reports
Q4 2020 Report
Boston
Connecticut
During the pandemic, inflation slowed to near zero for most of 2020 in Connecticut. Toward the end of 2020 there was some upward movement in pricing that resulted in about one to two percent escalation overall for the year. 2021 has seen a significant jump in escalation, up to four percent. We expect this to continue through the end of 2021 and at least part of 2022.
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction, 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
Connecticut
Connecticut
Want to discuss the local market position and forecast? Connect with Matt Impastato, Vice President of Preconstruction in Boston.
Local Insight and Commentary
Construction Cost Forecast Key
Next 6 months
Local Construction Cost Forecast
6 months - 1 year
1 - 2 years
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
During the pandemic, inflation slowed to near zero for most of 2020 in CT. Toward the end of 2020 there was some upward movement in pricing that resulted in about one to two percent escalation overall for the year. 2021 has seen a significant jump in escalation, up to four percent. We expect this to continue through the end of 2021 and at least part of 2022.