The turn of the calendar has brought about an unfortunate turn for material pricing. At this point, it seems like nearly all materials have seen major increases. All of this is in line with some of the largest inflation increases ever. What’s going on?
While each material has its own nuances, the primary driving cause behind all of them is the same condition we’ve been dealing with for years: High demand supported by low-interest rates means a lot of construction is happening right now. Costs are up quite simply because projects continue to be built in spite of them. Subcontractor backlogs have been surveyed as being at some of the highest levels in recent history. And there doesn’t seem to be an end in sight.
The message now is to stay the course in spite of material cost increases. We know challenges and pressures are being put on developers in these wildly unpredictable times, but we don’t see or hear of any relief in the near future. Waiting to start projects in hopes of prices coming down is a risky move because no one can accurately predict how long that will take and to what extent they will rebound.
Bruce Douglas
Executive Vice President, Midwest
