Building materials prices increased in the fourth quarter of 2021, but declines are expected in the first quarter of 2022

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Linesight, a global construction consultancy, expects building material prices to decline in 2022 after hitting record highs last year. Much of the inflationary pressure on prices was due to shortages caused by pandemic-related supply chain issues, increased global demand, labor disruptions and extreme weather conditions.

The results are part of Linesight’s fourth quarter commodity report and price forecast, based on interviews with more than 160 industry experts across the world.

In 2021, prices for essential building materials like copper, timber, steel and cement hit record highs amid shortages. These higher delivery costs and delays blunted construction output to $1.626 trillion from previous projections of $1.645 trillion. However, with the passage of the US infrastructure bill, total construction spending is expected to rise to $1.701 trillion in 2022, a 4.5% increase from 2021.

While the U.S. construction industry still faces many of the same challenges, Linesight expects to see prices decline in 2022. Here are some highlights from the report.

  • Flat steel prices saw the largest year-over-year increase in 2021 for products tracked in the report, rising 131% to $1,486/MT ($1,348/t) , driven by demand for durable goods such as household appliances and automobiles. However, as global and domestic production increased, Linesight expects prices to decline slightly, flat steel by -0.8% and steel rebar by -0.7% in the first quarter 2022.
  • Timber prices jumped 32% in 2021 to $9.9/cu. feet due to labor disruptions and destructive wildfires in Canada and the United States. Demand, particularly from residential construction, continues to be strong. Linesight expects lumber prices to rise moderately by 0.7% in the first quarter.
  • The price of copper has climbed just over 50% in 2021, to $9,451/MT ($8,574/t), due to production issues in China and Peru and increased global demand. However, as the supply chain normalizes, Linesight sees prices drop 2% in the first quarter.

“The cost and availability of building materials will continue to be a challenge for the industry in 2022, but we are seeing moderation and falling prices for many of these products,” said Patrick Ryan, executive vice president. , Americas, Linesight. “However, with an increase in infrastructure projects and demand for residential units, we expect construction activity to see continued growth in the coming years.”

To request the full report, click here.

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