The price of building materials, from concrete and steel to lumber and glass, has a major impact on the construction industry and the economy overall. As the cost of building materials increase, the result is tighter budgets, stalled jobs, and other complications that ripple out to affect other industries and life in general.
The high cost of materials like brick, steel, and cement means that private and public building projects often cannot move forward or must be scaled back. Business, residential, and public service building growth is slowed as a direct result. Apart from just affecting the construction industry, an increase in construction materials cost also affects labor markets, homeowners and hobbyists.
Increased construction cost affects products that aren’t immediately thought of as building materials, such as paint, plastic, rubber, composites, and other materials that are used for essential components and parts. This means that completing repairs and DIY projects, becomes more costly, causing homeowners to delay nonessential home improvements. This affects the growth of local home improvement stores and building suppliers.
Building Materials Price Trends 2021 And Beyond
In 2021, the cost of building materials and new construction increased to record highs. This was due to many factors stemming from the effects of the Coronavirus pandemic, including supply chain obstacles, exasperated labor shortages, trade and tariff issues, and more. The pressing need for infrastructure updates and new residential spaces has kept demand high.
Construction industry professionals, current and prospective homeowners, and many other people have been asking: when will building materials go down? So far, industry experts have expected 2022 building materials costs to remain in trend with 2021.
Even as supplies improve and some raw material price bubbles burst, many distributors are aiming to recoup profits lost during construction activity slowdowns. Construction materials costs have also been affected by inflation along with the price of many other goods. Building material price trends are expected to remain consistent with rising energy, labor, and supply costs.
The Effects Of High-Cost Building Materials
Rising building material costs have many far-reaching effects on society. As material prices go up, architects and construction firms typically take on fewer projects or greatly reduce their scope, contractors will raise their prices to preserve profit margins, and homeowners will put off their own home improvements.
Infrastructure, commercial, residential, and mixed-use development will also slow. This often leads to fewer home sales and business openings, along with other stifled progress, which curbs economic growth overall.
This can be avoided and remedied when labor and supply gaps are narrowed and material processes stabilize. This enables normal levels of construction activity to resume. If this stabilization doesn’t occur in a timely manner, lasting market upsets and downturns can be expected.
Article Sources:
https://www.abcactionnews.com
https://www.supplychaindive.com
https://www.minneapolisfed.org
