Since the costs of lumber, steel and other building materials began to skyrocket in the summer of 2021, Archinect has tracked the continuous fluctuation in construction costs. During our July construction coverage, the cost of lumber started to drop, which brought a slight glimmer of relief. However, this eventual “return to normalcy” is not without additional challenges.
Previously, Archinect reported that the drop was “attributed to a number of factors, including cuts in speculative trade and DIY home construction, and a gradual normalization of supply chains as economies reopen after more. one year of reduced production “.
According to a recent report of Construction diveby Sebastian Obando, however, the next impending issue that the industry continues to disagree with is project delays and labor costs.
Associated Builders and Contractors chief economist Anirban Basu explained that with the construction industry unemployment rate “falling below 5%”, the cost of labor is become more and more expensive. Assign the new Delta variant as the main reason for the economy’s lagging behind in the rebound, Basu continued to share with Obando, “The third quarter will only herald poor economic growth. This will keep the Federal Reserve in stimulus mode a little longer than it would otherwise.” As a result, he expects project owners to continue to postpone construction start dates.
Daniel Pomfrett, vice president of Cumming Management Group, told Obando that with the current decline in material prices, labor is the next thing the industry needs to watch. According to Pomfrett: “If you take the timber markets, for example, even though timber prices may go down, there will always be price increases. [on the project] overall because the labor shortages are there. He added, “As people come back with more construction projects, we will have more work ahead than we have for the workforce.” “