15 February 2022
Linesight has released its latest Commodity Reports, covering the trends and outlook for construction materials pricing and supply for 14 countries around the world, including the US, UK, Singapore, Australia, Ireland, the Netherlands, France, Germany, Italy, India, Japan, Taiwan, New Zealand and Hong Kong. These reports are comprised of data collected from an extensive program of both primary and secondary research.
You can request a copy of your report of choice at this link.
To read the press releases for some of our country-specific reports, please click the country in question below:
New York, February 14, 2022 — Linesight, a global construction consultancy firm, expects prices for construction commodities to decline in 2022 after hitting record highs last year. Much of the inflationary pressure on prices was due to shortages prompted by pandemic-related supply chain issues, increased global demand, labor disruptions, and extreme weather. However, with the passage of the US infrastructure bill, it is expected that total construction spending will jump to $1.701 trillion in 2022, a 4.5% increase over 2021. The findings are part of Linesight's fourth-quarter Commodity Report and price forecast, based on interviews with over 160 industry experts across the globe.
In 2021, prices for essential construction materials like copper, lumber, steel, and cement hit record highs amid shortages. These higher costs and delays for delivery blunted construction output to $1.626 trillion, compared to previous projections of $1.645 trillion.
While the US construction sector still faces many of these challenges, Linesight expects to see declines in prices in 2022. Following are some highlights of the report.
Prices for flat steel saw the most significant year-over-year increase in 2021 for the commodities tracked in the report, rising 131% to $1,486/MT ($1,348/t), driven by demand for durable goods like appliances and automobiles. However, while global and domestic production have ramped up, Linesight expects prices to decline slightly, flat steel by -0.8% and steel rebar by -0.7% in the first quarter of 2022.
Lumber prices surged 32% in 2021 to $9.9/cu ft due to labor disruptions and destructive wildfires in Canada and the United States. Demand, especially from residential construction, continues to be strong. Linesight expects lumber prices to climb moderately by 0.7% in Q1.
The price of copper spiked by just over 50% in 2021, to $9,451/MT ($8,574/t) from production issues in China and Peru and increased global demand. However, as the supply chain normalizes, Linesight sees prices declining by 2% in the first quarter.
"The cost and availability of construction materials will continue to be a challenge for the industry in 2022, but we do see moderation and declines in prices for many of these commodities," said Patrick Ryan, Executive Vice President, Americas, Linesight. "However, with a surge in infrastructure projects and demand for residential units, we expect construction activity to see continued growth in the coming years."
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Singapore, February 7, 2022 – Linesight, a global construction consultancy firm, sees construction commodity prices in Singapore to remain at record high levels in 2022, as the construction sector deals with inflation, high material costs, and shortage of skilled labour. By the end of this year, Linesight expects that real construction output will surpass its pre-pandemic level. The findings are part of Linesight's 2021 fourth-quarter Commodity Report and price forecast.
Metal prices, which include copper, steel rebar, and flat steel are expected to ease slightly
quarter-to-quarter between Q4 2021 and Q1 2022. Owing to higher prices in 2021,
construction companies working on Housing and Development Board (HDB) projects
have been given more support in the form of protected prices for steel, but an
improvement in the global supply-demand balance will support a steady easing of
prices in 2022.
Copper prices spiked at a 50.1% year-on-year increase between 2020 and 2021 and will
remain relatively high moving into 2022 albeit is expected to ease somewhat at
a 2.2% reduction from Q4 2021 to Q1 2022, assuming a recovery in production
levels and a normalisation of the supply chain. On the other hand, prices of
cement concrete, lumber, bricks, and plasterboard are expected to increase from
Q4 2021 to Q1 2022 due to increasing raw material and conveyance costs.
Lumber prices in Singapore continued to rise over Q4 2021, and although upward
pressures will ease, the ongoing recovery in residential construction will keep
prices relatively high in the coming quarters.
Michael Murphy, Director at Linesight Singapore, said: “Building material prices have
soared in 2021 and it will stay at high levels in 2022. It will take at least
another year, which is in early 2023, before we see prices of building
materials stabilises to pre-COVID levels. This means that new construction and
renovation projects – be it commercial or residential – will cost more than
usual. A big reason building material cost more these days is that supply
chains were disrupted during the pandemic. Those supply chains now need to
catch up with demand. Once that happens, the cost of building material could
start to decline but until that happens, prepare to pay more for newly built
commercial or residential units.”
Real construction output is expected to reach US$18.4 billion in 2022, and US$19.4
billion in 2023, a year-on-year increase of 15.4% and 5.6% respectively.
Meanwhile, Singapore was ranked 14th globally in terms of ease of
doing business, demonstrating a conducive regulatory environment for business
The price for metal, lumber, and other building materials rose sharply in 2021,
affecting most international cities across Asia Pacific, and the record high
costs will stay for the rest of 2022.
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Sydney, February 11, 2022 — Linesight, a global construction consultancy firm, sees construction commodity prices in Australia declining in 2022 but remaining significantly higher than 2020 levels. Still, price volatility experienced in 2021 has subsided. It also expects total Australian construction spending to top $212.7 billion in 2022, a nearly 5% increase from 2021. The findings are part of Linesight's fourth quarter Commodity Report and price forecast.
Commodity prices for construction materials like lumber, steel, copper, and concrete surged to unprecedented levels in 2021. There were several factors behind the growth in prices. The pandemic disrupted production cycles, impacted the supply chain, and backed up imports and exports. A surge in demand amidst a global slump in copper production sent prices soaring in 2021, while higher coal and iron ore costs increased the cost of steel.
While many of these challenges are still present, Linesight sees declining prices in 2022. Following are some highlights of the report.
Copper prices surged to $12,527 (AU$/MT) in 2021, a 45% jump compared to 2020 due to increased demand and a slump in production. However, Australian copper production rose nearly 3% in 2021 and is expected to grow by an average of 2.5% until 2023. Linesight expects this increased output to reduce copper prices by 2% in the first quarter of this year.
Flat steel prices jumped 43% to $1,083 (AU$/MT) in 2021 due to production delays in China and the increased cost of coal and iron ore. However, production has increased while delivery times have dipped near the end of last year. Linesight expects prices to decline by 1% in the first quarter of 2022.
"Domestic demand for construction commodities will remain strong in 2022 due to the increase in public infrastructure spending," said John Carleton, Director, Australia and New Zealand, Linesight.
"While material prices are set to slip in the first quarter, there are still risks due to production disruptions or supply chain bottlenecks."
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Dublin, Ireland, February 15, 2021 - Linesight’s latest Quarterly Construction Materials Costs report shows that higher prices seen in 2021 are set to continue throughout 2022. The report reveals that supply chain disruption and continued high costs of production will remain a challenge for the Irish construction industry this year. While prices have started to soften for critical materials, including steel rebar, timber and copper, high demand, alongside challenges in distribution, will prevent a significant easing in prices in 2022.
Copper prices will be particularly challenging. Owing to a high dependency on the import of copper, domestic prices l soared in 2021 amid high global demand and constrained supplies. The recovery in Ireland’s construction industry, following periods of major volatility in 2020-21 owing to COVID restrictions, will boost domestic demand, but improvements in global supply will see prices ease from recent highs with a cooling of between 1 and 5% in 2022.
Domestic prices for steel are vulnerable to changes in global demand and supply, as was the case during 2021, when high raw materials prices and a recovery in demand pushed up prices. Prices will cool marginally in 2022 with an expected decrease of up to 5% on 2021 levels.
A recovery in demand as well as supply issues, particularly related to delays in processing licenses for felling, resulted in a surge in lumber prices in 2021. Prices are set to remain around the current high levels in the short term again due to sustained demand, until a return to normal operations in the forestry industry is seen.
The report shows that while the Irish economy proved resilient throughout 2021, construction output fell by 10.2% in real terms for the year due to an unexpected 6.1% YoY contraction in Q3 2021. Forecasts for 2022 are positive, with a projected increase of 6.2% in construction output to €29.7bn in real terms. As inflation continues to be a cause of concern for the Irish economy, Linesight tracks key commodity price trends on a quarterly basis to provide their clients and the industry at large with essential insights and guidance for managing multi-sectoral construction projects globally.
Richard Joyce, Managing Director, Linesight Europe, said: “We had hoped to see the price hikes of 2021 level off imminently. However, due to the Omicron variant of COVID-19 and continuous supply chain issues, the industry will continue to be challenged for some months to come, unfortunately.”
“In the current market environment, it is imperative that sophisticated procurement approaches are deployed, coupled with prudent supply chain management in order to mitigate and manage risk, improving the predictability of project outcomes.” concluded Joyce.
Linesight is a multinational consultancy firm with over 45 years' experience, providing cost, schedule, risk and project management services to a multitude of sectors including Life Sciences, Data Centers, Commercial, High-Tech Industrial, Residential, Hospitality, Healthcare and Retail. Linesight’s specialist project teams, each with specific skills and experience, provide faster project delivery, greater cost efficiency and maximum value for money for their clients. For further information, please visit http://www.linesight.com
Fiona D’Arcy for Linesight
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