As the U.S. economy gears back up in the wake of the pandemic and global supply chains issues play havoc with the availability of various goods, construction prices are going up. A recent report from the real estate services firm JLL found that from August 2020 through August, the average final construction cost for commercial properties in the U.S. rose by 4.5 percent. The firm’s researchers forecast that by the end of the year, total construction costs will have increased by more than 6.0 percent, followed by a similar increase in 2022. When it comes to construction materials specifically, the average cost of a commercial development project rose by 23.1 percent during the period. In fact, materials supply issues have been responsible for 22 percent of commercial project delays this year, the second most significant factor after owner-led decisions. In 2020, those types of issues accounted for just 3 percent of project delays. And the issue might last for another year—JLL predicts that construction materials costs will rise by another 5 to 11 percent over the next 12 months.
However, the level of price volatility has varied depending on the material. For some common construction products, the price increases this year have been the highest in more than 70 years. For others, the increases are more comparable to what happened during the previous real estate cycle, in 2010.
To show where the most striking increases are showing up, JLL put together a construction material volatility ranking, showing which materials have seen the greatest swings in prices recently. To see which materials are seeing the most volatility and which are the least volatile, click through our gallery.
