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
| Sep 6, 2022
Demand for flexible workspace reaches all-time high
Demand for flexible workspace including coworking options has never been higher, according to a survey from Yardi Kube, a space management software provider that is part of Yardi Systems.
| Sep 2, 2022
Converting office buildings to apartments is cheaper, greener than building new
Converting office buildings to apartments is cheaper and greener than tearing down old office properties and building new residential buildings.
| Sep 2, 2022
New UMass Medical School building enables expanded medical class sizes, research labs
A new nine-story, 350,000 sf biomedical research and education facility under construction at the University of Massachusetts Chan Medical School in Worcester, Mass., will accommodate larger class sizes and extensive lab space.
Giants 400 | Sep 1, 2022
Top 100 K-12 School Contractors and CM Firms for 2022
Gilbane, Core Construction, Skanska, and Balfour Beatty head the ranking of the nation's largest K-12 school sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
| Sep 1, 2022
ABC: Nonresidential Construction Spending Increases by a Modest 0.8% in July
National nonresidential construction spending increased 0.8% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
| Sep 1, 2022
The University of Iowa opens the new Stanley Museum of Art, a public museum for both discovering and teaching art
The University of Iowa recently completed its new Stanley Museum of Art, a public teaching museum designed by BNIM.
| Aug 31, 2022
A mixed-use development in Salt Lake City provides 126 micro units with mountain views
In Salt Lake City, a new 130,000-square-foot development called Mya and The Shop SLC, designed by EskewDumezRipple, combines housing with coworking space, retail, and amenities, as well as a landscaped exterior for both residents and the public.
Mass Timber | Aug 30, 2022
Mass timber construction in 2022: From fringe to mainstream
Two Timberlab executives discuss the market for mass timber construction and their company's marketing and manufacturing strategies. Sam Dicke, Business Development Manager, and Erica Spiritos, Director of Preconstruction, Timberlab, speak with BD+C's John Caulfield.
Giants 400 | Aug 29, 2022
Top 50 Senior Living Facility Contractors + CM Firms for 2022
Whiting-Turner, Ryan Companies US, W.E. O'Neil Construction, and KBE Building Corp. top the ranking of the nation's largest senior living facility contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Aug 29, 2022
Top 40 Student Housing Facility Contractors + CM Firms for 2022
J.H. Findorff & Son, PCL Construction Enterprises, Juneau Construction, and Sundt Construction top the ranking of the nation's largest student housing facility contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.