Q1 2021 Quarterly Cost Report Charts Construction Trends in Cities Throughout North America
The Q1 2021 quarterly cost report data shows that despite the slow-down in construction, the combined effects of material price increases with challenges in maintaining the supply chain have sent costs escalating back to the familiar range of 1% per quarter (4% annualized).
In the last 12 months, construction materials prices have increased strikingly. The price of copper has almost doubled, from a low of $2.11/lb. to $4.01/lb.; aluminum has risen from $0.73/lb. in April 2020 to around $1.05/lb. in March 2021; and lumber skyrocketed to nearly $1,000/MBF in March 2021.
“Looking ahead, my expectation is that construction price pressure will increase as the year goes on due to the stimulating effects (on the construction industry) of at least the ebbing of the COVID-19 pandemic and the stimulus provided by the American Rescue Plan Act,” said Julian Anderson, FRICS, President of RLB North America. “If the Biden administration is successful in pushing through an infrastructure plan, then that should keep the momentum going for a few more years.”
A few highlights:
- The U.S. quarterly national average increase in construction cost is approximately 0.99%, compared to 1.82% year-over-year
- The U.S. Gross Domestic Product (GDP) growth has rebounded to 4.1 during the fourth quarter of 2020
- The Architectural Billings Index (ABI) dropped to 42.6 from the previous quarter’s 47.0