Symbiont Market Update | Material Cost Escalation

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Symbiont Market Update | Material Cost Escalation

 

Raw material unit prices impact equipment costs and construction costs. Prices on material and commodities have increased drastically in 2021. Our supplier partners report double-digit percentage jumps most months and price increases with little warning.

Construction input prices are 23.1% higher than a year ago, while nonresidential construction prices increased 23.4% during the same timeframe. Energy prices also continue to skyrocket. Natural gas is up 146.7%, while crude petroleum and unprocessed energy materials prices are up 102.9% and 93.8%, respectively. Prices for steel mill products increased 10.8% last month and are up 108.6% for the year.

Prices have shown signs of leveling. However, we do not know if they will hold. According to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data, construction input prices rose 0.6% in July. Nonresidential construction input prices increased 0.8% for the month.

See the stainless sheet metal index below for an example which correlates to pipes and carbon steel tanks.

Unusual supply shortages of certain basic piping commodities are occurring, and we have been made aware that stainless steel pipe saddles are jumping from a week lead time to greater than a month. Materials cost on piping for processing have essentially doubled. The following steel pipe graph also demonstrates how budgets can easily be affected due to these fluctuations.

Additionally, if you have a metal building on your project, it may be greater than a 30-week lead time.

We are also encountering very long delays for control panel components (input/output, variable-frequency drives, etc.) due to the global chip shortage. Components typically taking a few days, or a couple weeks at most, to deliver are now taking several months. Some lead times for items ordered now are out to December.

Further, escalation of electrical materials cost is apparent and impacting budgets. The tables below show a 62% cost increase for PVC conduit and 54% to 66% for copper wire.

In addition to personal communications, we provide this information on market conditions to help you understand and prepare for potential impacts on the timing and cost of your projects.

If you would like to discuss further, please visit our Contact Us page to get in touch.