NEW ENGLAND MATERIAL COST & LEAD TIME TRENDS – MARCH 2021

Spring 2021 report from SLAM Construction Services indicates continued price fluctuations and long lead times for multiple materials and products. High demand and low production has caused construction materials to be scarce, and thus unprecedently high. This trend has been predicted to linger throughout the summer months ahead.

Raw Materials:

• Demand for oil and gas typically follow a predictable seasonal swing. With the vaccine rolling out to 16-year-olds and older now, people are more likely to travel and schedule vacations.
• Although this last quarter has seen a slight drop in the cost of some raw materials, overall steel, nickel and iron ore prices remain high. The supply and demand squeeze is being felt across most of the raw materials and will continue through the summer.

Construction Materials:

• Structural steel pricing has hit an all-time high, with a huge back-up demand from contractors. The factories cannot keep up with the supply, thus creating increased cost and longer lead times. A new report out from Nucor states pricing will continue to increase as long as the demand outweighs production. With unpredictable price fluctuation, local contractors can only honor bids for 30 days.
• Lumber prices continue to rise and will soon level off, but with strong demand, it is not likely that the prices will be coming back down any time soon. The demand for new homes is so high that even during an economic crisis we hit a 14-year high in new housing starts in late December 2020.
• With the demand for steel products, LGMF (light gauge metal framing) has also jumped in price. After talking with a local supply house, prices will continue to increase into the summer and fall.

MEP Equipment:

• A local mechanical contractor has reported a 10% increase in material and 5% increase in equipment. Smaller equipment, like terminal units, have seen a lead time of up to 8 weeks.
• Electrical components have seen a jump in price and lead times. Equipment, wiring and light fixtures are also rising in price due to steel, aluminum, and copper material pricing.

Jared Cormier