The newly released Quarterly Construction Cost Insights Report for Q3 2023 from Gordian reveals material costs remain high compared to prior years, but there is a move towards price stabilization for building and construction materials after years of significant fluctuations.
In this report, top industry experts from Gordian, as well as from Gilbane, McCarthy Building Companies, and DPR Construction weigh in on the overall trends seen for construction material costs, and offer innovative solutions to navigate this terrain.
Uncertainty continues to reign. While construction material indices reveal overall price stabilization in 2023, individual products may still see significant variations. For example, prices for lumber, steel pipe and aluminum have seen double-digit decreases in the past 12 months, yet concrete, glass, gypsum, and insulation have experienced double-digit increases.
Gordian Construction Index Manager Adam Raimond says that while some items like structural steel are trending downward closer to pre-pandemic levels, he doesn’t think they’ll hit those levels anytime soon. He does say he expects prices to flatten or creep slowly upward again over time because demand for construction materials is not subsiding.
It is expected that almost every category will reach a “normal” rate of price change in 2024, but challenges posed by labor shortages and a bustling market may offset potential material cost savings. Regional cost pressures are also expected to play a major role in pricing. It is anticipated the industry will ultimately return to a more predictable pricing landscape, with most construction materials experiencing a yearly price change of less than 5%.
The Quarterly Construction Cost Insights Report examines key data points surrounding construction material pricing. The pricing trends of these six key building materials will be examined:
- structural steel
- framing lumber
- concrete block
- copper electric wire
- fiberglass insulation
The Report also looks at the historical cost index which offers a closer look at pricing trends, and the city cost index, which offers a targeted view of localized market variations.
Building models used to calculate the price data and an explanation of how national average material costs are determined by Gordian’s RSMeans Data team are featured in the report.
Access the full Quarterly Construction Cost Insights Report, Q3 2023, here.