Why is construction expensive right now?

As time has passed since the beginning of the pandemic, construction materials become less readily available making their prices go up. This shortage has made the construction industry struggle to find materials that will fit within a normal budget. Fuel, copper, steel, aluminum, and lumber have all increased in prices, lumber being the most dramatic jumping to a 375% increase. According to Rider Levett Bucknall’s “Q2 2021 Quarterly Cost Report,” the national average construction costs have increased by 4.35% from April 2020-April 2021 and Colorado construction costs have increased by 2.19%. We decided to ask some General Contractors for their opinion of the material shortage to get their perspective since they are affected by this material shortage first hand.

Where do you see this material shortage going?

David Garabred, Denueve Construction

“We do anticipate commodity prices coming down somewhat, although likely not to pre-pandemic levels.  Things like lumber, steel, and resin should come down from their current prices.  However, there has also been a market correction for some commodities that goes beyond the supply and demand imbalances that we have seen over the last 14 months.  The cost of transportation has also increased.”

Sarah Shipman, Palace Construction

“I expect material prices to fluctuate. At some point, things will get too expensive and projects won’t get funded if they continue to skyrocket. Also, now that factories are operating at full capacity the supply shortages will hopefully simmer down.”

What materials do you all find most challenging to obtain?

David Garabred, Denueve Construction

“OSB, type NM wire, PVC, and insulation have been in short supply.”

Sarah Shipman, Palace Construction

“Personally PVC and appliances have been the hardest to get but I know lumber is also an issue. I’ve heard that metal, insulation, and paint are all in short supply as well.”

What advice do you have for clients and A/E Design Firms to help keep projects on track and on a budget?

David Garabred, Denueve Construction

“Get submittals reviewed and approved early so that materials can be ordered.  Consider taking deliveries of material early to store until it is needed.  Make arrangements with lenders to allow for things like deposits or off-site stored materials to lock in pricing and guarantee availability.  Be flexible with equal/alternate specifications.”

Sarah Shipman, Palace Construction

“Ask the contractors what is available and what the project type can afford while working on the design. Once something is decided it’s a good idea to get it under contract and ordered as soon as possible. That one can get tricky when it comes to funding since you can’t release the money until the project has been funded.”

My last week at WORKSHOP8 is coming up!

This month was my 6 year anniversary with WORKSHOP8. It has been an amazing journey and I have learned so much from this amazing team. On July 16th, I will be leaving WORKSHOP8 and turning the page on this fulfilling and incredible chapter of my life.

Thanks for reading!

Ivan Patino | Architectural Designer

08 JULY 2021