NOTE: This information is current as of June 29th 2021.
Picture this: you’re a business owner looking to expand your enterprise, and in most cases, that means construction is on your horizon in some shape or form.
Unfortunately for this year, pandemic-related supply chain issues have ravaged the construction industry worldwide, ultimately grinding the production of raw construction materials you need to a halt.
But now that our world has learned to cope with the pandemic, the construction industry is back on the rise, and with it, the demand for these materials. Now to those reading this in the construction industry, this is nothing new. However, the people who work in industries that are intertwined with ours, i.e. commercial real estate, this is something that may not be on everyone’s radar.
To help educate the minds who aren’t fully submersed in construction, we’ve put together this short list of tips to remember when aiding and/or managing your clients’ construction endeavors.
Don’t underestimate the power of projection. It’s so important that the budget accurately reflects the current market AND takes into account the possibility of future spikes. Thankfully, CCB has the ability to lock in pricing for a set period of time even if the market continues to change. Here’s some recent stats that will give you an idea of just how much material pricing has skyrocketed:
LUMBER – in the last week, prices have stabilized from $1,700 in early May to just under $900 for 1,000 board feet of lumber, but this is a far cry from what prices were 2 years ago (around $350).
STEEL – As the leader in rising prices for major commodities, steel is up over 50% since last year due to the shutdown of production in the early part of the pandemic. Prices are more than likely continue to rise for another quarter and should also expect lead times of more than 4 months.
DRYWALL – similar to lumber, drywall prices have also stabilized but are still up almost 7% after seeing above average volatility in the second half of last year. Expect to see similar rates with other gypsum products as well.
Don’t feel like you should wait for prices to drop. Despite all the increases in material cost, CCB still has many ways in which we can save money. Accelerating or phasing the project schedule and exploring alternative material options are just a couple of ways that we do this.
Know your lead times. It’s one thing to know how much you’ll end up paying for material. Knowing when exactly you’ll get it to the jobsite is an entirely different thing. That’s why it’s so important to be aware of long-lead items and tweaking the construction schedule to coincide with material delivery. CCB has been doing this for decades and has helped our clients flourish by optimizing the schedule and bringing them value in unexpected ways.
Look on the Brightside. Just recently, multiple sources within the industry reported that lumber prices are expected to go down by the end of summer. Manufacturers expect their back stocks to get back on track as well, which will bring the market back to level by the end of the year.
If anything, the last 18 months have taught us all one thing – and that is the importance of working with a contractor who is dedicated to bringing you the best value. We understand that construction can be scary during this time, but don’t let that deter you from Building Your Vision into Reality!