Adapting to Post-COVID Impacts and Weather-Induced Construction Challenges
Given all of the past impacts from the unprecedented events of COVID-19, the weather impacts on construction. The freezing weather in Texas and Louisiana in February caused a lot of damage to the chemical facilities. We are seeing challenging times for material costs, especially for those of us who are in the insulation space.
The Rising Costs of Construction Materials and the Impact on Project Viability
Contractors here have seen staggering material cost increases over the past year as surging supply and demand chain bottlenecks have pushed prices to record highs and many predict those issues won’t end this year. Lumber and plywood saw the second-largest year-over-year price increases, at 85.7%; steel mill products, 67%; copper and brass, 49%; aluminum, 20.5%; and plastic construction materials, 14.2%, according to AGC’s most recent analysis of government data. Supply shortages and increasing prices have yet to show a demonstrable effect on project demand, but likely will slow or outright halt projects if these trends continue.
Stay tuned for an interesting back half of 2021
Here are some of the things that we may see happening as we move forward.
Economic boom coming
Driven by government spending and pent-up consumer demand
increased supply shortages
Supply Shortages will continue to grow
Long-term inflation risk
Risk of higher long-term inflation growing.
Temporary Surge Expected in Mortgage Rates
Mortgage rates will rise but will return to more “normal” levels.
Accelerated U.S. Pandemic Endgame
The Pandemic endgame is ahead of schedule in the U.S.
House price increases will continue
Demand for housing will continue to be strong
Housing Market Set for Growth
Big job gains and credit availability will boost housing
Urban to Suburban Shift Continues
The move from cities to suburbs will continue
These are all just thoughts about what may be an equally interesting back half of 2021, driven by the many unprecedented challenges of the past 16 months. Hang on and be prepared to pivot again.
