As building material prices begin to stabilize, labor costs will affect the industry as we enter 2022 | New
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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 by Construction diveSebastian 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. Attributing the new Delta variant as the main reason for the economy’s lagging behind in the rebound, Basu continued to share with Obando, âthe third quarter will only mark poor economic growth. This will keep the Federal Reserve in stimulus mode one. little longer than not. be the case. ” 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: âIf you take lumber markets, for example, even though lumber prices may go down, there will always be price increases. [on the project] overall because there are labor shortages. He added, “As people come back with more construction projects, we will have more work ahead than we have for the workforce.” “