Looking At The Construction Material Cost Forecast 2021 and Beyond

Why Are Costs Up?

Most of the jump in material costs that have impacted commercial buildings comes from four main places: wood, metal, rebar, and concrete. Logistical and transportation challenges due to the COVID pandemic in 2020 have made some significant building materials scarce. For Instance, in some communities, suppose you are looking for your favorite canned soda. Come to find that your local market no longer has canned soda. This issue is due to the scarcity of aluminum.

It's a non-construction example, but it shows that many things that have been generally taken for granted have been disrupted. When people are sick and can no longer work or even have died because of COVID, products like concrete gets held up. As we all know, when products are or appear to be limited, the prices go up—simple supply and demand. 

Rebar is another major one, and you can't just "grab more rebar." This material is vital for a variety of necessary expansion and construction projects throughout the world. The material can be bid up to ridiculous amounts by massive projects, making a limited supply even more expensive.

Considering how important these materials are, it's easy to see why things are so expensive. It would be nice to say things will get better (and eventually they will). The early signs for 2021 are a bit rough when it comes to construction costs. In other words, things are likely to get worse for at least some of these supplies before they get better. It is wise to work with an honest company with deep ties to the material industry so that your construction costs make sense. 

Construction Material Cost Forecast 2021

Some things might get cheaper, but concrete will be in even more demand in particular. There are still many, many commercial projects in the works, and the record-breaking hot market is not slowing down. That means even as things get back to normal, there will already be pent-up demand for concrete. Still, the newly increased demand for new projects means concrete is likely to stay expensive or get even more so. On the other hand, as more work has gone remote, some demand for new commercial buildings could slow down. Steel or other building materials other than concrete may go up. This increase may be due to landlords of vacant office buildings needing tenant improvement construction work done to accommodate new industries in their facilities.

What Does This Mean for You?

The construction material cost forecast for 2021 will continue to change until people, and the world gets back to producing and shipping materials like before. The demand for new buildings and housing is still going strong. So it's likely to be a tiny bit more expensive for at least the short term, unfortunately. However, it is not going to break your bank.