Construction Industry Year-end Report
Like 2020, 2021 was a wild year across the building industry. From material costs to labor shortages and massive delays, things were challenging. BUT, there were bright spots, and there is plenty of hope on the horizon.
There are three big takeaways shown below, thanks to data from our friends at constructiondive.com and the Bureau of Labor Statistics:
Despite massive increases in material costs across the industry, lumber and plywood have begun to settle and are now fluctuating well below their pandemic peak. And although steel prices still remain high due in part to tariffs and mill shutdowns during COVID, the U.S. has lifted tariffs on imported steel and aluminum from Europe, which should help to drive prices back toward normalcy.
With the macroeconomic trends accelerated by the pandemic, employees across many industries received increased pay. While construction workers did not see the same wage growth as other industries, increases provide a solid retention and recruiting strategy for companies looking to scale up: pay more and workers will come!
With material prices, distribution and shipping costs, and higher wages needed by employees, bid prices for jobs have not kept pace with input costs. While we imagine this will continue to be a challenge, companies need to ensure they are covered when submitting bids and understand that, with inflation, passing along costs is the best way to remain profitable.
Overall, there is plenty of news—both good and bad. We find the most successful of our building industry clients are those who engage in creative problem solving and find positives to focus on while persevering through each and every challenge they face.
Wishing your business the best of building in 2022.