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Rivlyn Manning & Zachary Bergeron   
August 23, 2021

Steel Increases, Volatility

The cost of structural steel has been volatile across the United States with steel supply pricing sharply increasing since March 2020.  We have gone almost a decade without being dramatically impacted by increases in steel commodities; arguably this was only a matter of time.

At the beginning of the pandemic-driven shutdown, many steel mills halted production citing fears of a prolonged recession and possible depression.  Unanticipated changes in consumer demand for steel-related products increased during the COVID-19 lockdown. However, furnaces were idle long after demand started to increase triggering a supply shortage. With Covid-19 vaccines readily available world governments have relaxed lockdown protocols and economies have been firing up.  The lockdown applied breaks are coming off the pandemic-driven economic shutdown. 

If you're a Heating Ventilation and Air Conditioning engineer, you probably know a lot about Delta Ts, air contaminant concentrations, and so on. However, you might not know a whole lot about paleoclimatology.
The technology in these forms not only provides higher R-value but also achieves a better living environment due to thermal comfort achieved by maintaining a continuous and consistent interior temperature. They can also provide greater building strength, while simultaneously reducing construction time and cost.
Like the overall economy over the past year, the construction market has been in a state of flux. We thought it would be helpful to provide a quick market update prior to the release of our Q1 2021 Market Outlook report, which will be issued in the upcoming months.
As most of you have heard, lumber prices have increased a dramatic 100% year over year. Do you remember the toilet paper shortage? Well, this was the beginning of our lumber market surge.
As construction economists, we encounter our share of elephants: a high-tech mechanical system, complex façade geometry, adjusting costs for a pandemic, etc. But, what do you do when a client asks you to price a building that resembles an elephant?
Designed to boost domestic production and as part of an economic strategy of “putting America first” President Trump announced on March 1, 2018, his intention to impose a 25% tariff on steel and a 10% tariff on aluminum imports.

The most common theme is a project budget that is set inaccurately by trying to use dollar per square foot ($/sf) estimates and benchmarks. We understand there needs to be a starting point, but is there a better way?  I will give you the conclusion right up front:

As most of you have heard, lumber prices have increased a dramatic 100% year over year. Do you remember the toilet paper shortage? Well, this was the beginning of our lumber market surge.
HQ2 fever has economists in North America speculating more than high rollers at a Vegas casino. At the onset, major metropolitans on the East coast and even an Alaskan community, threw their hat in the ring to be considered for Amazon’s second headquarters.
Are you in a busy market and maybe concerned that the trades are stretched too thin? Are you concerned this may result in a lack of competition and an undesirable number on bid day? 

Construction Economists