April Consigli Market Update

Consigli Construction has released its latest market update. The hopeful trend toward price stabilization and supply chain improvements in early 2022 is now complicated by new challenges. The war in Ukraine has reduced the supply of raw materials, port congestion from China to Los Angeles continues to delay shipments on all goods, while new COVID-19 variants have continued, leading to a forecasted overall escalation of 7-9%.

The market report highlighted the following trends:

► Product Availability – Overall demand for materials will remain high with supply moderately low.

• A recent COVID-19 outbreak in China is slowing chip manufacturing due to reduced labor resources.
• The war in the Ukraine has reduced the supply of manufacturing materials such as aluminum, iron ore, nickel and copper sourced from Ukraine and Russia. It has also put a strain on the production and delivery of materials manufactured throughout Europe, such as security glass from Germany. Normal shipping routes from Asia to Europe have been altered to avoid the war zone, which is adding time to deliveries.
• Port congestion is showing little signs of improvement. West Coast ports appear to be improving, but this is primarily a cause of shipping vessels diverted to ports on the East Coast. Shipping analysts are reporting that a high volume of vessels is scheduled to depart from Asia within the next couple months, which will further add to delays.

► Pricing Challenges – Contributing factors to the rising costs of construction pricing include the increased fuel prices raising the cost of production and transportation of materials, sanctions on Russia are affecting the commodity market by driving up prices of raw materials and wage increases are increasing overall labor costs due to inflation.

► Labor – The construction industry continues to stay strong with no immediate signs of slowing. Acquiring workforce, the Northeast in particular, remains an area of concern. Currently, Boston, Massachusetts union pipefitters, sheet metal workers, and insulators are employing upward of 480 travelers from other states on the east coast from as far as Florida. Many subcontractors, union and non-union, are booking up to capacity for 2022 and focused on 2023 and beyond. These strong backlogs will challenge workforce availability and continue to drive prices up.

To learn more, visit consigli.com.