Q4 2023: Construction Materials Update
STEEL
Steel has shown an overall decline throughout 2023 due to production catching up to demand. Projections for Q4 2023 have steel remaining steady while 2024 expects a moderate increase in steel demand that could slightly drive prices back up. Steel demand is driven by six main sectors with Construction & Infrastructure being the largest. Other sectors include, Auto and Transportation, Appliances, Mechanical Equipment, Electrical Equipment, and Machinery.
Hot Rolled Steel- used for common building structural steel shapes like Beams-Columns-Brace Frames, is down 17% from Q2.
Cold Rolled Steel- most commonly used for Metal Stud Framing products and corrugated concrete decking are down approximately 10% on the year.
Plate Steel- is used mostly for road construction and bridges, has remained level in cost.
PLUMBING & PIPING
PVC Piping and Carbon Steel Pipe prices have shown a constant slide since the beginning of 2023. Copper Pipe had a wild uptick in Q1, but have returned to price levels seen at the beginning of 2023.
CONCRETE
Concrete and Cement products remain stable going into Q4 2023. There has been much improvement to the availability of Ready-Mix concrete for typical building construction foundations and slabs.
Precast Concrete Products- used typically for “Tilt Up” concrete buildings shows a mild uptick Q1-Q3.
Prestressed Concrete Products- are most commonly used for piles, poles, bridge girders, etc. and experienced extreme rise in pricing through the middle of the year.
Concrete Block & Brick- used primarily for road construction and bridges, has remained level in cost.
Ready Mix Concrete- (not shown on graph) is used for poured-in-place foundations and slabs, has shown a 9% increase through 2023 with projections for 2024 hinting towards a mild 3% increase in cost. It is expected that supply conditions will improve.
Fiberglass Insulation
Fiberglass Insulation Batt or Blanket, Kraft Paper Faced, 3 ½” R11 continues to trend on the upswing.
Manufactures just announced 7% increase effective January 15, 2024. Some insulation products are on allocation.
National average costs per square foot continue to rise in Q4.
ELECTRICAL
EMT Conduit is down 20% this year while Copper Wire has maintained constant pricing with only mild fluctuations. Looking ahead, both EMT and Copper Wire products are expected to see slight increases in 2024 due to some supply concerns with forecasted deficits.
HVAC Equiptment
HVAC saw a 15% increase from April 2023 to October 2023 based on the following HVAC items used for a 15,000 SF space build out to track costs:
1) 12.5 Ton Packaged Unit
(1) 17.5 Ton Packaged Unit
(1) 10.0 Ton Packaged Unit
(3) Hail Guard Kits
(3) Roof Curb Kits
Filters
Commodities Surcharge
Freight
Total Cost April 2023 $52K vs Total Cost October 2023 $60K = Net Difference: 15% Increase
Increases are due to raw material costs, high labor rates, high fuel and transportation costs, regulatory changes, new SEER2 changes, and refrigerant requirements (R-410a refrigerant now required and is 4x higher than last year).
HVAC Sheet Metal Ducting
Sheet Metal, material used for hard ducting, has stabilized throughout 2023 with no real movement. Recently, some slight changes in pricing this year trending towards a dip to finish out the year.
The nickname “Tin-Knocker” is used for Sheet Metal Workers who fabricate metal ducting with rhythmic hammering heard throughout the jobsite!
METAL STUD FRAMING
Metal Stud Framing materials have made a radical increase from Q1 2023 to the middle of Q2, sky rocketing 70-80%. However, since the middle of Q2 2023, we have seen a correction bringing the material cost back to January 2023 prices. The latest announcements hint at two upcoming price increases: one at the end of November 2023 and another first week of January 2024. This could result in a 20% increase from today’s pricing.
Steel Sheet, used for manufacturing metal stud framing products, notched a third consecutive week of gains in October 2023 due to limited supply and stable demand outside of automotive operations impacted by the UAW strike. There is a divergence of opinions on the future direction of sheet steel prices. Some sources say they will continue to rise on long lead times and limited spot availability. Two major manufacturers have announced increases. Mill capacity utilization was at approximately 74% last month.
Steel Market Update (SMU) data from late October shows continued increases. Hot-Rolled Coil price stands at $725 per ton ($36.25 per cwt), up $30 per ton from $695 per ton last week and up $80 per ton from a 2023 low of $645 per ton in late September. Prices for Cold Rolled and coated products also increased. Cold Rolled and galvanized base price are both at $925 per ton, up $15 per ton from a week ago and up $60 per ton from late September.
This Centerline chart shows SPECIFIC pricing for common Metal Stud Framing items, Drywall, and Plaster products; illustrating contractor purchase pricing changes in the last 4 months.
Framing Lumber
Framing Lumber continues to decline in Q4 2023 after already dropping 18% for the year. The forecast is a 30% drop in total by the end of 2023. Lumber and plywood are abundant and contractors are no longer experiencing supply issues. Predictions include things leveling off going into 2024 despite the possible impact of the Canadian wildfires this year.
