Remember the lumberyard frenzy of 2021? When building a deck felt like buying a used car? Well, buckle up, because construction material costs have been on a wild ride the past few years. Here’s a breakdown of where we were in 2021, how things have changed in 2024, and what it means for your next project.
The 2021 Construction Material Cost Boom
Lumber Mania
Softwood lumber prices skyrocketed, driven by supply chain disruptions and pandemic-fueled DIY projects. Think 2x4s priced like gold bars.
Ripple Effect
The lumber surge caused a domino effect, impacting other building materials like plywood, roofing, and even concrete. In May of 2020, the Producer Price Index (PPI) of plywood was at 198. By June 2021, the PPC had peaked at 471, which is a 130% increase in just over one year. The PPC has since settled at 283 but that is still an increase of almost 50% in only four years.
Overall Inflation
General construction material costs inflation wasn’t as dramatic as lumber, but it still hovered around the 5-6% range.
The 2024 Construction Material Cost Shift
Lumber Levels Off
Thankfully, lumber prices have come down significantly from their 2021 peak. They’re still not back to pre-pandemic levels, but they’re much more manageable.
Mixed Bag for Other Materials
Some materials like fiberglass insulation have seen price hikes due to shortages and energy code changes. Others, like concrete, remain elevated due to high demand.
Labor on the Rise
While material costs may be stabilizing somewhat, be prepared for an increase in labor costs. Skilled workers are in high demand, pushing project budgets upwards. This labor shortage is expected to become more and more critical as people increasingly opt for careers in non-construction industries.
What it Means for You:
- Budgeting is Key: Do your research and get multiple quotes before starting your project. Factor in potential material fluctuations and prioritize labor costs.
- Consider Alternatives: Can you use substitute materials that offer similar performance at a lower cost? Discuss options with your contractor.
- Embrace Flexibility: Be prepared to adjust your timeline or materials based on changing market conditions.
The Future of Construction Material Costs:
Experts predict that material costs will likely remain stable shortly, with potential increases for high-efficiency and low-emission materials. Labor costs are expected to continue rising.
The bottom line? Building a home or undertaking a major renovation will likely cost more than it did in 2021. However, with careful planning and sequencing, a good contractor can still achieve your construction goals in 2024. Joe’s Construction Company specializes in long-term projects that require careful planning and execution. Contact us for more information on how to approach your next project.
