Q1 2024: Construction Materials Update

This year we are keeping track of material price increases and decreases based on valued input from our GC contacts, vendors, suppliers, and experts. We are using Q4 2023 as our baseline and analyzing how material costs fluctuate, or stay the same, in each quarter of 2024. Currently, Q1 is experiencing notable pricing decreases in metal stud framing and notable demand increases for electrical equipment. Commodities such as sheet metal and structural steel remain flat. Please find more detail and forecasting on the following material pages.

STEEL

Structural steel prices maintain stability into the new year and will hold through mid-Q2 2024. There are no signs of erratic price changes on the horizon as seen in 2023. The most recent price trends and projections point to minor but steady cost increases for the first half of 2024.

Steel prices mainly affect the Construction & Infrastructure sector. All eyes are on new building starts, and what will actually materialize with the 2024 demand on steel.

Hot Rolled Steel- has leveled off at $990 per ton, trending down since the beginning of 2024. This is used for common building structural steel shapes such as Beams-Columns-Brace Frames.

Cold Rolled Steel- most used for Metal Stud Framing products and corrugated concrete decking. This has been the most volatile steel product. Centerline’s sources reported spike in November, December and January 2024. There were (3) 10% increases announced. However, the February increase faded away. Now metal stud prices are dropping as fast as they went up. We are back to prices seen in October 2023. The projections are that prices have settled in and, if anything, are trending down for the first half of 2024.

PLUMBING & PIPING

Plumbing materials are expected to rise at a moderate rate of 2% to 4% throughout 2024. Shorter lead times are expected with sufficient inventory. Some lingering supply chain issues will impact various product.

The sales market for new plumbing products and materials is booming due to new innovations, sustainability pressures, and popularity for equipment produced by Kohler and Moen. Additionally, new products are gaining traction such as, smart leak detectors, faucets, and water heaters as water efficiency standards drive sales of many plumbing fixtures meeting these criteria.

CONCRETE

Ready Mix Concrete (RMC) increased nearly 12% throughout 2023. The pricing leveled off at the end of 2023 and into the beginning of 2024. We are now seeing some increases in mid-Q1 2024. Projections show a 7% increase in demand for 2024 vs. 2023. The pricing is expected to continue a climb in 2024. Availability of RMC for typical building construction poses no issues. There is a constant demand put on the RMC market due to two primary factors driving the market growth, 1) Global infrastructure development 2) Increase in urban development.

Ready Mix Concrete- is currently priced at an average cost of $180 per Yard. A standard 9 Cubic Yard Truck with a 3000 PSI 3/8 Gravel Mix will cost approximately $1,800 including tax and delivery with regional cost variations. This will cover approx. 20’x25’ slab 6” thick or a Round Concrete Column 3’ Dia x 34’ High.

RMC current average price

$180 per YD

Fiberglass Insulation

Fiberglass Batt Insulation continues to trend on the upswing since Q2 2021 and hasn’t looked back. The future outlook of the fiberglass insulation market is favorable. Manufactures announced a 7% increase on January 15th, 2024 that was implemented on February 5th, 2024. This increase is on the heels of the Q4 2023 10% increase. The substantial growth expected in the coming years is driven primarily by factors such as the increased demand for energy-efficient buildings with two primary design criteria and features that insulation provides.

1) R-Value measures thermal transmission through walls, floors, and ceilings

2) STC Rating (sound transmission control), a measure of performance of sound blocking characteristics.

Current pricing

30 Kraft Faced Insulation $1.13 psf

Rockwool 3” Sound Insulation $1.17 psf

ELECTRICAL

The electrical industry anticipates a continued rise in material costs somewhere in the 4% to 7% range throughout the year. Electrical components remain the exception as they have already experienced significant material price increases and are still trending up. This is due to the cost increase trajectory of meeting sustainability requirements, digitalization, and AI advancements. Switchgear and Transformer equipment lead times remain lengthy with a wait time of 50 to 80 weeks. This is primarily linked to supply chain issues, rising demand, material shortages, and labor constraints. Proactive planning is a must to avoid delays in the projects progress.

HVAC EQUIPMENT

We are seeing steady increases continuing from 2023 and going into 2024. Our sources have announced a 5% increase from Q3 2023 to date, this is on top of a 15% increase from April 2023 to Oct 2023.

Reasons for the increases are said to include:

1) Regulatory changes > AIM Act: In which the EPA is phasing out HFCs (hydrofluorocarbons) and reduced production by 40% in 2024.

2) High demand for latest equipment that is conservation compliant and with latest technology.

3) Lingering supply chain issues

4) Increased raw material costs

5) Increased labor rates

HVAC Lead times are currently

12-20 weeks

HVAC Sheet Metal Ducting

HVAC Sheet Metal material has remained stable into 2024 with no real movement. Galvanized G-90 Sheet Steel was $0.67 per LB going into Jan 2024 and has not changed to date.

METAL STUD FRAMING

Metal Stud Framing materials continue into 2024 with radical price changes. Coming off significant upward spikes in November and December 2023, we saw another 10% increase in January 2024. However, the tide has shifted as we are currently seeing prices drop as fast as they went up! We are back to October 2023 pricing. The major mills like Nucor and Cemco anticipated great demand for January that did not materialize. This triggered a reversal in prices with a continued downward trend in February.

Framing Lumber

raming Lumber prices have increased slightly with a current price increase of 2% since Q4 2023. Lumber and plywood are abundant as inventory is strong. Predictions include a moderate single digit increase throughout 2024 however this is based on anticipated demand for new home starts. Currently, the interest rates are stagnating the building starts. Therefore, it all comes down to where interest rates go in the next few months. If rates stay high, the supply and demand rule will create somewhat drastic price drops.

*This Centerline chart shows SPECIFIC pricing for common building lumber materials showing purchase pricing changes over the last 4 months.*

drywall & sheet products

There was a recent wallboard increase of $20/msf on gypsum board products such as 5/8 Type X and regular gyp. Specialty boards such as Water Rated Board, or Mold Resistant Board, and Densglass Gold, have not changed.