The construction industry is caught between a rock and a hard place: workers are ready to start building, but demand is falling as material costs rise.
The ongoing novel coronavirus pandemic is continuing to wreak havoc on the architecture and construction markets (see the catastrophic May Architecture Billings Index numbers for proof), even as construction jobs return in states that have eased restrictions on non-essential projects.
Case in point: Construction costs have reportedly fallen for the first time since 2010, but according to Associated Builders and Contractors (ABC), a national construction industry trade association, raw material costs rose by 2.2 percent in June. Non-residential material inputs rose by 2.3 percent.
The increase in material costs follow (for a second consecutive month, costs were up by 0.8 percent in May) stem in part from the ongoing battering of the global supply chain by coronavirus-related disruptions, something predicted all the way back in March, when the flow of both raw materials and finished goods already began to slow.
“For many contractors, lack of demand for their services has emerged as the leading source of concern due to the COVID-19 pandemic, followed closely behind by a fear of inflation and a potential increase in materials prices,” said ABC chief economist Anirban Basu in a statement. “June’s PPI [U.S. Bureau of Labor Statistics’ Producer Price Index] data indicate that they are right to be concerned.”
Read on >>>> Source: ArchPaper Construction costs fall as material prices continue to rise