Gordian’s Q1 2024 Quarterly Construction Cost Insights Report brings good news on construction material prices: Although there are some materials whose prices have continued to show volatility, costs at a macro level are returning to a level of stability, suggesting predictable historical price escalation factors.
The Q1 2024 Gordian data analysis focuses primarily on:
- Fiberglass insulation
- Structural steel
- Framing lumber
- Copper electric wire
- Concrete block
- Conduit
Ups and downs of the construction material prices
As the interest in eco-friendly materials increases, the construction industry is taking note, developing products to meet the demand of green building certification. One such product has been significantly affected by this trend: fiberglass insulation. The high demand for it is discussed in depth in this report, a demand which continues unabated from previous quarters. Since Q2 2021, the price for blanket fiberglass material has nearly doubled. In addition to the movement toward energy efficiency in residential construction, Gordian attributes this to a boom in the home building market; greater government regulation for home insulation; and the lingering effects of COVID-19 on manufacturing.
Copper electric wire now remains steady from Q4 2023, exhibiting a slight decrease year-over-year. Price increases in the latter half of 2022 were driven by the shutdown of operations in copper mines in Peru and Panama, although it’s not known at this time if mining will resume.
Gordian also reports a significant downward trend in the cost of drywall. Post-pandemic, per-square-foot prices have dropped 11 percent from their highest point, seen less than just a year ago. Over the course of the past year, framing lumber has also seen a major decline in cost of nearly 19 percent.
Be prepared for construction material price variability
The experts say that while they expect improved pricing predictability at a high level for the balance of 2024, materials costs will each exhibit their own degree of variability based on a number of different factors. They advise that preparation is key, including analysis of localized cost trends while project planning. The full Gordian report contains a city cost index overview, including pricing changes between Q4 2023 and Q1 2024 for numerous major metropolitan areas in the U.S. and Canada. In the western U.S., for example, overall prices are trending toward a modest increase, but the variability does not seem tightly tied to geography alone.
With the pandemic behind us, a gradual stabilization is expected in 2024. However, raw materials shortages, weather events, and geopolitical unrest all introduce a level of unpredictability, and construction professionals are advised to keep an eye on the supply chain.
Related Stories
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Higher Education | Apr 13, 2023
Higher education construction costs for 2023
Fresh data from Gordian breaks down the average cost per square foot for a two-story college classroom building across 10 U.S. cities.
Market Data | Apr 13, 2023
Construction input prices down year-over-year for first time since August 2020
Construction input prices increased 0.2% in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices rose 0.4% for the month.
Market Data | Apr 6, 2023
JLL’s 2023 Construction Outlook foresees growth tempered by cost increases
The easing of supply chain snags for some product categories, and the dispensing with global COVID measures, have returned the North American construction sector to a sense of normal. However, that return is proving to be complicated, with the construction industry remaining exceptionally busy at a time when labor and materials cost inflation continues to put pricing pressure on projects, leading to caution in anticipation of a possible downturn. That’s the prognosis of JLL’s just-released 2023 U.S. and Canada Construction Outlook.
| Sep 8, 2022
U.S. construction costs expected to rise 14% year over year by close of 2022
Coldwell Banker Richard Ellis (CBRE) is forecasting a 14.1% year-on-year increase in U.S. construction costs by the close of 2022.
Market Data | Oct 11, 2021
No decline in construction costs in sight
Construction cost gains are occurring at a time when nonresidential construction spending was down by 9.5 percent for the 12 months through July 2021.
