Building Materials Prices Are Rising as Demand for Construction Increases
A recent construction materials report from construction cost data tracking firm Gordian reveals that since 2020, roughly 82.5% of construction materials have experienced an average cost increase of 19%. Building materials such as steel, wood, and concrete have seen price increases of 22%, 16%, and 15%, respectively, in 2023, and rising demand for construction is expected to keep prices for materials and labor high through 2024 and 2025, Construction Dive reports.
Despite the rising costs of certain materials, some prices this year have begun to show signs of softening, said Sam Giffin, director of data operations at Gordian. But don’t expect materials prices to sustain that falling trajectory, Giffin said.
“Although we’re in the middle of a downswing from historic pricing peaks in 2022, it’s likely that increasing demand for construction will sustain materials and labor pricing through 2024 and 2025,” said Giffin. “For example, although our models show concrete material decreasing 1% to 2% per year through 2025, we anticipate materials like wood, plastics, composites, plaster, gypsum and thermal protection to hit average increases up to 6.5% per year in the same period.”