Since lumber, steel, and other construction material costs began skyrocketing during the summer of 2021, Archinect has followed the ongoing fluctuation of construction costs. During our July construction coverage, the cost of lumber began to drop, which brought a slight glimmer of relief. However, this eventual "return to normalcy" isn't without its additional challenges. 

Previously, Archinect reported that the decline was "attributed to a number of factors, including reductions in both speculative trading and DIY home building, and a gradual normalization of supply chains as economies re-open following over a year of reduced output." 

According to a recent report from Construction Dive's Sebastian Obando, however, the next looming issue the industry continues to be at odds with is project delays and labor costs.

Associated Builders and Contractors Chief Economist Anirban Basu explained that with the construction industry's unemployment rate "back below 5%," the cost of labor has become increasingly more expensive. Attributing the new Delta variant as a primary reason for the economy's delay in bounceback, Basu continued to share with Obando, "the third quarter will usher forth only mediocre economic growth. That will keep the Federal Reserve in stimulative mode a bit longer than otherwise would be the case." As a result, he expects that project owners will continue to postpone construction start dates.

Daniel Pomfrett, VP at Cumming Management Group, shared with Obando that with material prices now waning, labor is the next thing the industry has to look out for. According to Pomfrett: "If you take lumber markets, for example, even though lumber prices may come down, there are still going to be price increases [on the project] as a whole because labor skillset shortages are out there." He added, "as people come back with more construction projects, we're going to have more work coming than we have for labor."