The building materials market has seen drastic demand and price increases over the last year and a half. Supply decreases have continued to stifle the construction industry, independent contractors, and private consumers, even as output has remained steady. Although some raw materials have started to return to their pre-pandemic rates, inventories and sales prices remain steep. How long will this materials supply and cost struggle continue?
Costs Tied To Inventory More Than Just Supply
Wood, concrete and cement, metals, rubber, and plastic, as well as other building materials, all remain at high prices, which, despite supply leveling, may still continue to rise well into next year. This has less to do with raw material output and is directly related to supplier and distributor inventories. A combination of higher raw material prices and greatly narrowed profit margins through much of 2020 have many suppliers and contractors now trying to make up for losses. This means that costs to the private consumer, whether homebuyer or hobbyist woodworker, will not only remain high but may very likely increase, even if by moderate rates.
Which Materials Are Most Affected?
Market watchers expect material prices to hover around their peak or somewhat greater through at least the middle of 2022. Although all major building materials will be affected, some are leveling off faster than others. Materials that are always in demand in many markets, such as timber, steel, plastic, and rubber are expected to be more vulnerable to fluctuations due to competition alone. Heavy industrial materials, like concrete, cement, and brick will be more likely to settle at steadier rates, although prices may drop later than more competitive materials, partly because of inventory replenishment delays due to higher transport costs. Some market analysts have predicted that concrete and cement prices aren’t likely to decrease significantly before summer of next year.
Material supplies and costs are not the only hindrances to the construction industry, especially in the United States; ongoing labor shortages and the lingering impacts of Covid-19 have taken their toll on this sector. Have you been affected by such obstacles professionally or in your home upkeep and DIY plans? Comment and share your experience.