{"id":901831,"date":"2023-11-07T15:50:24","date_gmt":"2023-11-07T22:50:24","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901831"},"modified":"2023-11-07T15:50:29","modified_gmt":"2023-11-07T22:50:29","slug":"construction-material-prices-are-we-finally-getting-relief","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-material-prices-are-we-finally-getting-relief\/","title":{"rendered":"Are We Finally Getting Relief from Price Escalation in Materials?"},"content":{"rendered":"\n<p>Colm Nelson | <a href=\"https:\/\/www.aheadofschedulelaw.com\/2023\/10\/articles\/construction\/construction-and-design\/are-we-finally-getting-relief-from-price-escalation-in-materials\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Ahead of Schedule<\/a><\/p>\n\n\n\n<p>It is no secret that the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/materials-price-escalation-clause-construction-contract\/\">price of construction materials<\/a> has increased dramatically over the last three years. The price surge has been attributed to COVID-19, foreign wars, and other events throughout the globe, such as a Suez Canal blockage and an unprecedented ice storm in Texas, among other reasons. Consequently, through the use of allowances, contingencies, and other contract mechanisms, owners and contractors have been apportioning in unique ways the risk associated with these inflationary pressures. It was not unusual for a hard bid or a guaranteed maximize price (GMP) contract to have carve-outs for certain material price escalations. Even today, delivery times for some products, such as electrical switchgear, have been extended by certain suppliers.\u00a0<\/p>\n\n\n\n<p>But perhaps 2023 marks an inflection point? The producer price index for \u201cFinal Demand Construction\u201d and \u201cNew Industrial Building Construction,\u201d below, issued by the Federal Reserve Bank of St. Louis, both indicate prices have generally flattened this year, albeit with a slight uptick the last few months. From this author\u2019s perspective, more contractors are willing to provide a hard bid or GMP without carve-outs for material price escalation. This could be a function of both lower inflation in the market as well as fewer construction starts, meaning more competition.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.aheadofschedulelaw.com\/wp-content\/uploads\/sites\/983\/2023\/10\/Picture1.png\" alt=\"\" class=\"wp-image-4633\"\/><\/figure>\n\n\n\n<p>U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Final Demand: Final Demand Construction [PPIDCS], retrieved from FRED, Federal Reserve Bank of St. Louis (Oct. 30, 2023),\u00a0<a href=\"https:\/\/fred.stlouisfed.org\/series\/PPIDCS\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">https:\/\/fred.stlouisfed.org\/series\/PPIDCS<\/a>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.aheadofschedulelaw.com\/wp-content\/uploads\/sites\/983\/2023\/10\/Picture2.png\" alt=\"\" class=\"wp-image-4634\"\/><\/figure>\n\n\n\n<p>U.S. Bureau of Labor Statistics, Producer Price Index by Industry: New Industrial Building Construction [PCU236211236211], retrieved from FRED, Federal Reserve Bank of St. Louis (Oct. 30, 2023),\u00a0<a href=\"https:\/\/fred.stlouisfed.org\/series\/PCU236211236211\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">https:\/\/fred.stlouisfed.org\/series\/PCU236211236211<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Colm Nelson | Ahead of Schedule It is no secret that the price of construction materials has increased dramatically over the last three years. The price surge has been attributed to COVID-19, foreign wars, and other events throughout the globe, such as a Suez Canal blockage and an unprecedented ice storm in Texas, among other&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-material-prices-are-we-finally-getting-relief\/\">Continue reading <span class=\"screen-reader-text\">Are We Finally Getting Relief from Price Escalation in Materials?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,11442],"class_list":["post-901831","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-construction-material-prices","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are We Finally Getting Relief from Price Escalation in Materials? 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