Report: Construction costs may increase 14.1% this year
That's according to CBRE Group Inc. , which is forecasting a 14.1% annual increase in U.S. construction costs by the end of 2022, thanks to industry labor shortages, inflation, supply chain disruptions, ongoing impacts from the Covid-19 pandemic and the war in Ukraine. That annual price increase, if it occurs, would outpace the 11.5% escalation in construction costs seen last year.
"When you have everyone pre-purchasing materials, a lot of people are front-loading cash flows and schedules to make sure they have the labor and materials," McNamara said. Already there's been a slowdown in residential construction. Overall housing starts fell 9.6% to a seasonally adjusted annual rate of 1.45 million units in July, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Single-family starts specifically decreased 10.1%, to a seasonally adjusted rate of 916,000, and are down 2.1% on a year-to-date basis.
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