The sky-high costs of construction materials due to the coronavirus pandemic are a topic we cover frequently here at Contractor News. Now a new report suggests that material prices won’t go down until summer of 2022.

The report is by a project of the financial institution ING which provides analysis and forecasts. They suggest that brick and cement will hold out at high prices for another year, but steel and timber could drop sooner.

As we have previously noted, and as ING does in its report, disruptions to the supply chain caused by coronavirus shutdowns have caused prices to increase, because demand for these materials actually remained relatively steady throughout the pandemic. This has led to contractors making even less money on their projects when margins are traditionally low in the industry to begin with.

And as ING notes, “a large number of suppliers are still planning price increases,” even though metal and timber prices have come down a bit from their peaks. A study from July by the European Commission stated that 40 percent of concrete, cement and brick suppliers said they would further raise prices, and an even higher percentage of steel and timber suppliers said the same.

Labor shortages and the uncertainty of how the Delta variant will affect recovery plans are also a big part of the problem.

The reason timber and steel prices are expected to fall sooner is because there are more suppliers and buyers: it’s just a bigger market than concrete, brick and cement, which tend to be bought and sold locally while timber and steel are more global. As ING puts it, “this makes these markets competitive and transparent and this results in a more direct pass-through in the value chain of price changes of raw materials.”

“We expect shortages of timber and steel to remain an issue until at least early 2022,” the report states. But with these materials, there’s less of a delay between supply stabilization and price stabilization.