The data presented here is a review of Q3 the 2021 construction industry.  Two key insights are that material shortages continued in Q3 2021 and that material costs continued rising.

Summary of the Construction Industry During Q3 2021

  • The YoY cost of copper wire during Q3 2021 exceeded the YoY cost of lumber. Copper wire jumped +156% y/y.
  • Permit authorizations dropped significantly in the northeast while the other regions of the country saw increases.
  • 93% of commercial contractions reported at least one material shortage during Q3 2021.
  • Labor costs in the US are increasing faster, over +5% y/y, than in Canada.

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YoY Changes in Individual US Material Costs During Q3 2021

  • Copper wire increased +156% y/y
  • Plywood increased +88%
  • Copper pipe increased +66%
  • PVC pipe increased +45%
  • Lumber increased+41%
  • Asphalt shingles increased +6%

Q3 2021 to Q4 2021 YoY Change in US Residential Reconstruction Costs

Residential construction costs have increased q/q from -3.5% to +1.6% in each state.  The national average change in residential reconstruction cost in the US was -0.3%.

  • States where costs have increased the most:
    • Louisiana – +1.6% q/q
    • California – +1.6% q/q
    • Maryland – +1.2% q/q
  • States where costs have decreased the most:
    • Alaska – -3.5% q/q
    • Rhode Island – -2.7% q/q
    • Hawaii – -2.3% q/q

US Economic Indicators

On a YoY basis, the US economy has faced major disruptions.  Housing prices have skyrocketed with increases of +18.8% for existing single-family homes and +17% for newly constructed homes.  Unemployment has fallen significantly, home sales have increased and building permits were lower between Q3 2021 and Q2 2021.

Q2 2021          Q3 2021

Housing Starts                      1,588                1,566

Building Permits                    1,670                1,647

Home Sales                           6,517                6,795

New                            737                  738

Existing                      5,833                6,067

Unemployment                         5.9%                5.1%

Consumer Confidence                102.1               116.5

Home Price YOY Change

New                           +3.4%                +17.1%

Existing                       +6.8%                +18.0%

Thanks to CoreLogic.


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