State of The Industry: Expect More Price Increases
With the projected material shortages across the country expected to continue, business owners planning future construction projects should anticipate extremely long lead times, inflated material costs, and replacement materials as suppliers race to serve the current demand for many construction industries.
Over the past year, home project enthusiasts and the construction industry have watched as lumber prices increased 400%. The entire global supply chain continues to endure unprecedented levels of inflation. As of March 2021, steel material costs rose 70% in just three months bringing the total rise to more than 183% higher than in August of 2020. Even portable sanitation services and garbage collection have been affected.
Experts believe contributing factors to the increases include mill consolidation, decreasing material providers, equipment shortages, port congestion, rising fuel costs, ongoing global pandemic pressures, combined with the severe weather events in Texas, Tennessee, and Juarez, Mexico. The industry has seen a price increase announcement each month since the start of 2021 and many industries expect to see an additional 10% - 20% price increase effective in July above the already set June increases, including:
Steel 20%
Insulation 8%
Drywall 20%
Wallboard products (Sheetrock©) 20%
Water heater 10%
Insulation 15%
“During these unprecedented times, our team continues to value honest communication with our clients. We vow to keep our customers informed with the most up-to-date information to identify obstacles, overcome challenges, and stay in front of the future pricing decisions to protect your budget and timeline,” explained John Richards, Principal of J.C. Richards Construction Company, Inc.
Through August, the industry is predicting more pricing increases, continued material shortages, and construction supply lead times as far out as two to three months. We’re doing our best to keep costs in check. Pending quotes may suffer cost increases and J.C. Richards Construction Company will do our best to honor existing quotes, however, the nature of some scope increases may require a price update.
J.C. Richards Construction Company, Inc. is a full-service general contractor with 25 years of experience in commercial construction, office, industrial, medical, envelope, mixed-use, and multi-family. Our efficient processes utilize the latest technology to ensure your project meets timelines and your budget. For more information on how J.C. Richards Construction can offer creative solutions, visit jcrichards.com or give us a call at (253) 383-6206.