Construction Price Trends – Q1 2023

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Based on market research by MCP Group 

Please see our summary analysis at the end of this information for our recommendations on moving forward with your project successfully.

Construction Material Outlook – Q1 2023

Green Down

Lumber prices fell in 2022 and this trend is continuing into the 2023. We expect lumber prices to continue to decline and stabilize gradually over the next few months.  Higher mortgage rates and a slowdown in DIY home renovations are easing demand for lumber. However, we may see prices to turn upward again by the end of 2023 into 2024. The ongoing war in Ukraine could mean a reduced supply of wood globally. In turn, an increased U.S. housing demand combined with lower supply could mean higher lumber prices. But for now, the lumber price concern has eased. 

Yellow Up

Over the past few years, we’ve seen the prices of plumbing materials increase due to supply chain issues and material shortages. We’ll continue to see higher prices in 2023; manufacturers have already announced price increases averaging around 5%. Some manufacturers have preemptively raised the cost of equipment, parts and supplies, which is due to several factors, including increased labor rates, raw material costs and fuel and transportation costs. The U.S. Department of Energy will begin enforcing new energy-efficiency minimums on various equipment on January 1, 2023. The refrigerant changes may present short-term challenges for HVAC contractors. As we look forward into 2023 trends, we should prepare for continued price increases.

Gren Up and Down

Strong demand stemming back to 2020 caused semiconductor and material shortages that heavily impacted lead times on generators, switch gears, and electrical components. Material costs and lead times seem to be staying steady with what we saw in Q4.  Expanded production and efforts to re-shore some semiconductor manufacturing will hopefully help stabilize the supply for 2023, but it will take a while to recover.

Green Down
Structural/Miscellaneous Steel and Metal Studs: COSTS TRENDING

Steel is starting to look better in price and availability, including a reduction in the cost per ton for structural steel. Even with these improvements, prices will remain higher than what they were pre-2020.

Prices were elevated in the first half of 2022, then started to soften in August and September 2022 as major mills decreased prices. Prices were then relatively stable through October and November, but declined again in December following a late November mill price decrease. Analysts expect we will see further declines in early 2023, but outlooks remain clouded for the remainder of the year, and it is uncertain by how much pricing will ease.

As we saw throughout 2022, volatility continues to impact the steel market. Factors such as global economic uncertainty, recession fears, inflation and fuel prices all placed pressure on steel prices and demand.

Gren Up and Down


Roofing material costs could be considered steady during Q3; a slight dip in cost in July was cancelled out by a slight rise in August. This was a welcome respite from Q2, where large price increases were passed on due to manufacturers’ rising costs. However, the overall cost has risen due to soaring petroleum prices, with roof installations having gone up 15% in price in the past year alone. Labor shortages in the industry abound as well; keeping qualified employees on staff has been a challenge. It’s been necessary for many roofing contractors to pass up desired contracts simply due to not having enough help. 

Roofing costs are not expected to decrease in the near future. There is a yearly increase by manufacturers each spring, which distributors then pass on. Additionally, expect continued delays in receiving roofing materials, as warehouses remain short on labor and are not operating fully. Recent Hurricane Ian is also expected to mean higher demand. 

Relief is expected in Q1, 2023 though costs are likely to rise again as usual in Q2, 2023. 

Yellow Up

It would be rare to find a construction project that did not require this element, and unfortunately the cost of it has risen for seven quarters in a row at this point. Like most things, the cost of material coupled with increased demand has been driving this. Cost has surged over 18% in the past year, and over 3% last quarter alone. There is also at least one anticipated cost increase expected at the manufacturer levels, beginning in February. An increase is expected in Q1, though with hopes it will stabilize for Q2.

Gren Up and Down
Summary Analysis: Overall Cost Trends

The construction supply chain remains unpredictable, and workforce shortages continue to affect it on many different levels, from collecting & processing raw materials, to production, manufacturing, and transportation. It also continues to be influenced by the war in Ukraine; not only are there supply barriers, but an increase was triggered in the export prices of materials like copper and aluminum, as Russia is a heavy producer of copper and Ukraine is a major exporter of metals (as well as other raw materials.)

While some material prices are generally inching downward, and are thought to be settling, they are not expected to return to pre-pandemic prices. Fluctuations with the market are of course going to remain the norm. Design-Build services go a long way toward overcoming labor and lead time challenges—having the right commercial construction partner can make all the difference in navigating today’s challenges!

Disclaimer:  The information contained in this document is based on general market research and current and past experience in the construction industry and represents estimations and opinions only.  Any reliance, action, or inaction based on any of this information is at your own risk and MCP has no responsibility, obligation, or any liability relating thereto.