The last three years have represented an unprecedented time for construction markets with extreme escalation, material availability issues, supply chain woes and a skilled labor crisis.
Q1 2023 U.S. Construction Market Trends by CBRE Research covers all of it.
MATERIAL
- The Producer Price Index for Building Materials and Supplies Dealers grew slightly after two consecutive quarters of double digit decline.
- Major commodities costs continue to stabilize from previous volatility
- Construction material costs have remained flat for two consecutive quarters despite being higher YoY.
SUPPLY CHAIN
- Falling petroleum and fuel costs have helped reduce shipping and trucking costs.
- The General Freight Trucking Index fell for a second consecutive quarter showing further cooling in supply chain and manufacturing costs.
LABOR
- Non-seasonally adjusted construction unemployment rose to 6.9% combined with a workforce decrease of -3%.
- Construction wages are up 3.0% YOY after a slight decline from last quarter.
- Labor wages and sustained construction volume continue to contribute to project challenges.
CONSTRUCTION MARKET ACTIVITY
- An increased backlog of work persists for contractors.
- Architectural billings and contracts declined for a second straight quarter showing industry uncertainty.
- Construction industry market surveys report mixed messages for a third straight quarter reflecting recession fears and economic doubts.
CONSTRUCTION ESCALATION
- The Consumer Price Index for inflation continues to fall from it's 40-year high in June, and now sits at 6.0%.
- While cost escalation for 2023 is anticipated to remain "higher than normal", it is anticipated to return to historic average rates by the end of 2024.