The pandemic outbreak caused a massive strain on the supply, availability, and cost of
materials in different industries.
The construction industry was not spared, as the price of lumber and other materials
The rise in the price of building materials meant more expenses in repairs, renovations,
and new construction of both building prices and projects.
With things gradually returning to normal, the big question is, are construction material
We will attend to that question in this article. But first, what factors fueled the increase in
construction material prices in the first place? Let’s find out.
- The price of construction materials increased due to factory production cuts back during the pandemic, an increase in DIY projects, broken chain supplies, and high fuel and freight costs.
- Prices of some construction materials are declining as restrictions are lifted and post-pandemic normalcy returns.
- The Linesight Q2 report shows a reduction in lumber prices, a limit to pig iron supply, and restrictions due to the Russian-Ukrainian conflict.
- Experts expect stability to return to the lumber market by 2025 and advise large project developers to wait for it to stabilize.
Why The Price Of Construction Materials Increased
Factories Shut Down — When the pandemic hit, many factories had to close to curb its spread.
Lumber Mills and other material industries had to shut down or decrease production to
adhere to restrictions.
Industries had to ensure they cut back on production during these times to avoid being
stuck with a mass product to supply and less demand.
That meant less construction material available for consumption and an increased price
of the quantity available.
In May 2021, the price of lumber soared to $1,711 per thousand board feet, according
to market analyst and commentator Darin Newsom.
In contrast, the average price of lumber was about $300-400 per thousand board feet
before the pandemic.
Now, it’s around $600 per thousand square feet, according to Jack Izard, vice
president of natural resources investment at Domain Timber Advisors.
Increased DIYs and Renovations
Lockdown restrictions meant spending more time indoors and more DIY projects and
As stated in a McClatchy News report with Roberto Quercia at the University of North
Carolina Chapel Hill, who specializes in housing and community development, many
families engaged more in expansions and creating new home-office spaces than
The global construction industry has also been defenseless against broken supply
chains and freight and fuel costs, thus resulting in a remarkable increase in building
Now that we have brought you up to speed are construction materials prices declining?
Are Construction Material Prices Reducing?
Yes. The cost of construction materials is beginning to stabilize.
However, the industry is still on the comeback trail.
Patrick Ryan, for the Americas at Linelight, says, “high energy costs, labor shortages,
and tariffs are disrupting the availability of materials and preventing the cost of
construction from reducing.”
Hence, developers, builders, and homeowners won’t notice the lowering of prices of
construction materials till the beginning of 2023.
The Linesight Q2 commodity report of the United States provides insight on the prices
of construction materials:
Sequel to a significant price hike earlier this year, the lumber market remains volatile in
Although there is a reduced demand for lumber from the residential sector, its supply
Tariffs placed by the US on Canadian suppliers, low stock, labor shortages, and
increased lead will apply some pressure on prices.
Steel (rebar and structural)
Steel prices gradually reduced at the start of summer. The prices continue to decrease
as the demand reduces since the fear of downturns and lockdown in China lower
Moreover, the supply of pig-iron and semi-finished goods would probably remain limited
for the rest of the year.
Disruptions caused by the Russian- Ukrainian dispute will likely remain rampant and
cause a rise in prices above pre-pandemic levels.
Cement and Aggregates
In 2021 and early 2022, increased demand, the high price of crude oil, and higher
energy have driven the cost of asphalt production.
However, domestic and residential demand is falling due to climbing interest rates and
delayed infrastructure spending.
But it’s envisaged that as soon as infrastructure spending climbs, cement and concrete
prices will begin their upward trend.
Due to the Covid-19 lockdowns in China and an increase by the Federal Reserve,
copper prices have suddenly dropped.
Moreover, ongoing strikes and protests in Chile and Peru have led to limited trade since
they constitute about 45% of global copper production.
In the medium or long term, the demand and price of copper will be tight due to
continuous investment in electric vehicles and renewable energy production and
Concrete Blocks and Bricks
In 2021, restricted supply and high demand from the residential sector led to a surge in
But in 2022, reduced residential demand might clamp out price growth.
Still, some frailties exist, as high energy, limestone prices, and input costs will aid a
moderate rise in 2022.
Linesight United Kingdom Commodity Report also envisages ease and reduced
pressure in the climbing price of construction materials.
The predictions of the ease of material cost are in the table below:
Construction Material Price Change Forecast (Q2 toQ3, 2020)
Flat Steel: –3.9%
Steel rebar: -3.5%
Wielded Mesh: -0.5%
The Royal Institute Of Chartered Surveyors (RICS) released its Q2 2022: RICS UK
Construction and Infrastructure Monitor.
The report authenticates that there was a 25% rise in material prices last year; there is
expectant ease in the prices pressures and a reduction in the soaring commodity prices
in the coming months.
In the following year, the RICS report expects workloads in infrastructure to increase by
44%, compared with 22% for private residential and 38% for non-residential.
With these figures and reports, what does the reduction in construction material prices
mean for the future?
The Future Of Construction Material Prices
Homeowners and developers have more than just lumber to consider in their building or
Inflation has affected the price of everything, including labor, every component
necessary to build a house has increased in price now.
However, “there are indications that things will go back to normal; we are looking at
2025,” says Quercia.
Experts also say that lumber prices will drop with the reduction in US tariffs on
According to the National Association of Home Builders, duties on shipping Canadian
lumber to the US will go from 17.99% to 11.64%. This will soften the extreme price
swing in the lumber market.
Referring strictly to lumber, experts say it’s not a bad idea to build now or a couple of
months from now, as prices are relatively low.
However, they advise that anyone who can hold off on their large building projects until
price trends and inflation generally back down should do so.
Real Estate Market And The Decrease Price Of Construction Materials
Since there is still high demand for housing and the cost of lumber, though relatively
low, is still not as low as housing cost.
It’s still too early to say how the decreasing cost of construction materials will affect real
But builders can take advantage of the relatively lower prices in the coming months.
As construction material prices go down, builders and homeowners can keep abreast
with the trends for the best time to engage in construction projects.