Market Outlook Construction Forum Situation Report, April 9, 2021

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SUMMERY  AND SLIDE DECK

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Session Presenters

  • Aaron Brown, Vice President, Linbeck
  • Richard Vermeulen, Lead-Economist, Vermeulens
  • Melissa Chabot, Associate Principal, Director of Research and Development, Vermeulens
  • Blair Tennant, Associate Principal, Director of Business Development, Vermeulens

Market Forecast, Vermeulens

  • many commodities have increased in price: copper is up $2/lb., lumber is up by $800 (per 1,000 board ft.)
  • steel rates have gone up roughly $300/ton due to increases in material and labor costs
  • majority of the country remains in contracting construction market year over year
  • the decline of the USD is affecting commodity prices
  • construction employment nationally is down 200,000 jobs since the beginning of the pandemic
  • non-residential construction and infrastructure construction are down 7% and 4% respectively since February 2020
  • recommend carrying a bidding contingency on all projects due to potential upward volatility

Quarterly Forecast, Linbeck

  • steel joists have a 7-9-month lead time; electrical fixture parts manufactured overseas are experiencing delays
  • subcontractors are absorbing the spikes in the commodity prices to remain competitive
  • AGC has issued an inflation alert, due to the combination of price increases and supply shortages
  • increased investment in new projects and resolving shipping issues are needed to go back to normal
  • Q1 and Q2 has seen an increase in project proposals/RFPs
  • the price of oil is beginning to increase
  • AIA billings are up in Q4 2020 and Q1 2021
  • consider changing subcontractor contracts to Integrated Delivery or Construction Management to share risk for price volatility and supply bottlenecks

The Feds New Normal, Vermeulens

  • historical analysis of past financial crises and how they relate to our current economy
  • background on the fed’s influence on the economy






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