Article source: ConstructConnect
In 2021 and the first half of 2022, there were what might be termed ‘freakish’ year-over-year increases in construction material costs (see Graph 1). At its most extreme, the y/y price climb for construction material inputs collectively approached plus one third.
Since then, they have largely settled down, to the point where y/y material input costs are now being exceeded by y/y wage hikes (i.e., -0.5% compared with +5.9% as set out in Graph 1).
Graph 2 shows that it took a while for contractors to ratchet up bid prices to cover their material cost increases. There’s a bottom line, however, and it’s that construction material input costs and bid prices are both now up close to +40% compared with their pre-COVID positions.
