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Linesight’s latest quarterly report predicts stability (mostly) through the first half of 2023

Linesight’s latest quarterly report predicts stability (mostly) through the first half of 2023

Commercial and institutional construction spending is projected to be down 6.9 percent and 13 percent, respectively, in 2022, impacted by macroeconomic factors that include increasing demand for long-lead equipment, material shortages caused by supply-chain snags and the Russia-Ukraine war, and the instability of costs for fuel and labor.

That easing of demand has allowed key commodity prices to stabilize, and there is reason for optimism despite uncertainty about the health of the U.S economy that is only expected to expand by 1 percent next year.

This is the perspective of Linesight, a multinational construction consultant, which has released its Third Quarter Commodity Report for the United States. Patrick Ryan, Linesight’s Executive Vice President for the Americas, states that the “medium to long-term outlook remains positive, with [economic] growth expected in the coming years as inflation comes under control.”

The Report focuses on five key commodities:

•Lumber, whose prices have been on a downward trend since the first quarter. Supply-side fragilities have eased, as post-flood mill inventory in British Columbia is rebuilding.

•Cement and aggregates, whose prices have been affected by oil price turbulence. Linesight sees the slowdown in residential construction as easing pressure on this commodity’s demand, although that could also be negated by commercial demand spurred by the Infrastructure Investment and Jobs Act of 2021.

•Concrete blocks and bricks, whose prices are waning along with residential construction demand that is tamped by rising mortgage interest rates.

•Rebar and structural steel, whose prices had flattened during the previous quarter, and whose weakening future demand, especially from China, anticipates falling prices. However, Linesight also cautions that high energy prices continue to drive up steel’s production costs.

•Copper, whose price declines of late have stabilized. Supply disruptions and the lack of investment in new mining operations continue to contribute to production shortfalls, and demand remains “resilient,” especially as the manufacture of electric vehicle batteries expands.

The Report prognosticates as well about pricing for asphalt, limestone, welded mesh, drywall, and diesel fuel. It also forecasts commodity prices by regions of the country, although the geographic variations are, for the most part, marginal.

Perhaps the most important issue right now affecting commodity prices, says Ryan, is mixed data on the economy. Despite two consecutive quarterly declines, “there are positive indicators being recorded to suggest economic resilience in some key areas,” such as the lowest unemployment rate in five decades, and the Federal Reserve’s aggressive actions to curb inflation.

Another bright spot is labor productivity in the U.S., which still outpaces Germany, the United Kingdom, Hong Kong, Taiwan, South Korea, and Japan.

Skanska’s latest forecast sees shorter lead times and receding inflation, but the industry isn’t out of the woods yet.

Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).

National nonresidential construction spending was up by 0.5% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.

With a combined 3,523 projects and 400,490 rooms in the pipeline, Marriott, Hilton, and InterContinental dominate the U.S. hotel construction sector.

The ACEC Research Institute and the University of Colorado Boulder released what the White House called a “landmark study” on the design-build delivery method.

According to the third quarter Construction Pipeline Trend Report for the United States from Lodging Econometrics (LE), the U.S. construction pipeline stands at 5,317 projects/629,489 rooms, up 10% by projects and 6% rooms Year-Over-Year (YOY).

For the twentieth consecutive month architecture firms reported increasing demand for design services in September, according to a new report today from The American Institute of Architects (AIA).

The BD+C editorial team needs your help with an important research project. We are conducting research to understand the current state of the U.S. design and construction industry.

Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5.

Construction input prices dipped 0.1% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.

Skanska’s latest forecast sees shorter lead times and receding inflation, but the industry isn’t out of the woods yet.

Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).

National nonresidential construction spending was up by 0.5% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.

With a combined 3,523 projects and 400,490 rooms in the pipeline, Marriott, Hilton, and InterContinental dominate the U.S. hotel construction sector.

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