Written by: Simon Offstein and Collin Fitzgerald
Gordian recently published a report on construction costs for Q3 2024. Simon Offstein, Research Intern and Collin Fitzgerald, Research Manager, offer their perspective on the report.
The Q3 2024 Construction Cost Insights report from Gordian focuses on recent trends in construction costs across North America, providing valuable data on material and labor expenses. The report highlights fluctuations in prices for key materials such as structural steel, framing lumber, and concrete blocks. It points out that steel prices saw a 10.68% decline from Q2, reflecting stabilized demand after recent supply chain issues. Framing lumber prices, on the other hand, experienced a notable increase of 7.61% quarter-over-quarter. The report also examines regional differences, with the U.S. West and East Coasts seeing price increases in site work materials.
Our Take
This article provides essential insights for construction professionals, particularly in an environment where material prices are still highly volatile post-pandemic. The continuous drop in structural steel costs suggests stabilization, which is promising for large infrastructure projects. Regional price variations also emphasize the need for localized cost planning to avoid budget overruns. For businesses involved in long-term planning, understanding these trends is crucial to managing construction costs effectively and mitigating the risks associated with future price fluctuations.
Fiberglass
Early 2022: Supply shortages drove up prices after two years of decline.
2023: Prices held at higher levels, creeping up each quarter.
Q1 2024: Prices decreased by under 6% from Q4, with a year-over-year increase of more than 9%.
Q2 2024: Pricing relatively unchanged from Q1, with a minor downward trend of under 3%.
Q3 2024: Significant price jump. Current price is $0.77 per unit, with a 16.67% quarter-over-quarter increase and a 13.24% year-over-year increase
Copper
Late 2022: Significant price escalations driven by international supply chain issues.
2023: Prices increased into 2023, with a minor decrease in Q4 from Q3.
Q2 2024: Significant 10.83% price drop since Q1, with a 9% year-over-year decrease.
Q3 2024: Prices increased. National average cost is $341.71, with a 10.62% quarter-over-quarter increase and a 5.85% year-over-year decrease.
Conduit
Late 2022: Significant price escalations driven by international supply chain issues.
2023: Prices slowly fell from 2022 highs, with a slight increase in Q4.
Q1 2024: Prices down just over 4% from Q4 and decreased almost 15% year-over-year, continuing to fall slightly into Q2.
Q3 2024: Prices stabilized. National average reflects a 2.21% quarter-over-quarter increase and a 2.93% year-over-year decrease.
Concrete Block
2022: High price increases driven by supply constraints.
2023: Prices rose in Q2 but at a lower rate than Q1; slight declines in Q3 and Q4.
Q1 2024: 6.16% increase from Q4 2023. Q2 2024: 5.80% increase from Q1 2024, but a 7.14% year-over-year reduction, continuing the trend of stabilization.
Q3 2024: Prices stabilized with a slight increase. National average price is $2.38, reflecting a mere 0.42% quarter-over-quarter increase and a 0.42% year-over-year decrease.
Framing Lumber
2023: Lumber prices declined after climbs since 2020. Stabilization/decrease in Q2/Q3, slight increase in Q4.
Q1 2024: 6.24% decrease from Q4 2023; significant year-over-year decrease of 18.78%.
Q2 2024: Prices up from Q1 but nearly flat with Q4 2023.
Q3 2024: National average price reported as up 7.61% quarter-over-quarter and 12.12% year-over-year.
Structural Steel
Late 2022: Cost acceleration due to supply chain constraints.
Q1-Q3 2023: Cost stabilizations/decreases persisted. Q4 2023: 6.85% quarter-over-quarter increase, but still below 2022 highs.
Q1 and Q2 2024: No significant change in Q1 from Q4, followed by a 3.80% decrease in Q2.
Q3 2024: Continued downward trend. This quarter saw a notable 10.68% decrease from Q2, and an 8.18% decline year-over-year, reflecting stabilized demand.
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