The good news: the cargo and transportation snags that have encumbered building material availability this year showed signs of finally easing in September.
The bad news: the lack of material supply and increasing demand for labor are keeping prices high, to the point where manufacturers aren’t willing to hold price quotes for more than a week, if at all.
That, in a nutshell, is the state of the construction market, which the general contractor Consigli lays out in its Market Outlook for October 2021. The Outlook, written by the firm’s Director of Purchasing Peter Capone and Vice President of Preconstruction Jared Lachapelle, sends up red alerts about the availability of six product categories—steel joist, steel deck, MEP equipment, roofing insulation, lab casework, and mineral/rock wool—whose lead times for fabrication after release, as of Sept. 1, ranged from 20 to 40 weeks, with steel joists having the longest wait time.
The Outlook reports a 12 percent average price escalation for the 15 building materials tracked, and anticipates another 3 percent bump through the final quarter of this year. Roofing insulation, roofing membranes, gypsum wallboard, light-gauge metal framing, and glass exceed the overall averages.
As a result of large manufacturers not willing to take risks on escalating prices. “subcontractors are being changed market increases at the time of delivery,” states the report.
![The lead times for several building materials exceeds 20 weeks. Image: Consigli](/sites/default/files/inline-images/Consigli%20October%20Outlook.png)
MANAGING RISK TAKES DISCIPLINE
Consigli’s strategies for risk management include:
•lock in prices with subs that are willing to share risk
•buy in bulk quantities whenever possible
•consider alternative supply sources
•implement stringent quality assurance and control measures
•focus on weekly materials delivery verification
•pre-purchase and warehouse materials
•identify peak manpower needs
•utilize prefabrication that takes labor off site
•partner with trades through design-assist
Consigli thinks labor shortages could get worse in the second half of next year. The severity will depend, in part, on vaccination mandates at a time when a sizable number of construction workers still refuse to be vaccinated. But even a fully vaccinated workforce might struggle to keep pace with construction demand that the pending $1 trillion infrastructure bill, if passed, would further pressure.
The Outlook notes that some manufacturers are focusing their production capacities on commonly used materials like drywall and MEP equipment, which is limiting—and sometimes halting—the production of specialty products. And AEC firms need to be vigilant about maintaining compatibility and quality when manufacturers source products from alternate vendors.
Consigli sees some light at the end of this supply tunnel. Its Outlook notes that steel prices are starting to level off as production increases. But citing the National Roofing Contractors Association, Consigli also cautions that shortages in roofing materials and insulation (whose lead time right now is 24 weeks) will continue through next year because of raw materials supply issues.
Related Stories
MFPRO+ News | Jan 2, 2024
New York City will slash regulations on housing projects
New York City Mayor Eric Adams is expected to cut red tape to make it easier and less costly to build housing projects in the city. Adams would exempt projects with fewer than 175 units in low-density residential areas and those with fewer than 250 units in commercial, manufacturing, and medium- and high-density residential areas from environmental review.
Contractors | Dec 22, 2023
DBIA releases two free DEI resources for AEC firms
The Design-Build Institute of America (DBIA) has released two new resources offering guidance and provisions on diversity, equity, and inclusion (DEI) on design-build projects.
MFPRO+ News | Dec 22, 2023
Document offers guidance on heat pump deployment for multifamily housing
ICAST (International Center for Appropriate and Sustainable Technology) has released a resource guide to help multifamily owners and managers, policymakers, utilities, energy efficiency program implementers, and others advance the deployment of VHE heat pump HVAC and water heaters in multifamily housing.
Sustainability | Dec 22, 2023
WSP unveils scenario-planning online game
WSP has released a scenario-planning online game to help organizations achieve sustainable development goals while expanding awareness about climate change.
Giants 400 | Dec 20, 2023
Top 100 Apartment and Condominium Construction Firms for 2023
Clark Group, Suffolk Construction, Summit Contracting Group, and McShane Companies top BD+C's ranking of the nation's largest apartment building and condominium general contractors and construction management (CM) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Dec 20, 2023
Top 40 Student Housing Construction Firms for 2023
Findorff, Juneau Construction, JE Dunn Construction, and Weitz Company top BD+C's ranking of the nation's largest student housing facility general contractors and construction management (CM) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Healthcare Facilities | Dec 19, 2023
A new hospital in Duluth, Minn., is now the region’s largest healthcare facility
In Duluth, Minn., the new St. Mary’s Medical Center, designed by EwingCole, is now the largest healthcare facility in the region. The hospital consolidates Essentia Health’s healthcare services under one roof. At about 1 million sf spanning two city blocks, St. Mary’s overlooks Lake Superior, providing views on almost every floor of the world’s largest freshwater lake.
Government Buildings | Dec 19, 2023
New Pennsylvania State Archives building holds documents dating back to 1680
Work was recently completed on a new Pennsylvania State Archives building in Harrisburg, Penn. The HGA-designed, 146,000-sf facility offers numerous amenities, including computers, scanners, printers, a kitchenette with seating, lockers, a meeting room, a classroom, an interactive video wall, gallery, and all-gender restrooms. The features are all intended to provide a welcoming and comfortable environment for visitors.
MFPRO+ News | Dec 18, 2023
Berkeley, Calif., raises building height limits in downtown area
Facing a severe housing shortage, the City of Berkeley, Calif., increased the height limits on residential buildings to 12 stories in the area close to the University of California campus.
Green | Dec 18, 2023
Class B commercial properties gain more from LEED certification than Class A buildings
Class B office properties that are LEED certified command a greater relative benefit than LEED-certified Class A buildings, according to analysis from CBRE. The Class B LEED rent advantage over non-LEED is about three times larger than the premium earned by Class A LEED buildings.