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Linesight: Construction Material Prices Levelling Off But Downward Risks Remain

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Global construction consultant Linesight today released its United States Country Insight and Commodity Report for Q1 2023.

The report shows that while a moderate economic growth of 1.6% is expected in 2023, the construction industry is expected to contract by a further 0.9% due to continued decline in the residential sector, ongoing labor shortages, and elevated interest rates.

On a positive note, Federal initiatives and a growing number of mega-projects in chip manufacturing plants, data centers, clean energy facilities and infrastructure will bolster certain sectors within the industry and maintain price pressures on key materials such as steel and cement. Inflation is also steadying, with the lowest levels in nearly two years recorded in the U.S. in March, but will remain higher than normal, with an average of 4.7% expected for 2023.

Supply chain disruptions have also eased but many Long Lead Equipment (LLE) suppliers have reported being at operational capacity, with order books full up to Q3 2024.

Across all sectors, labor continues to be a concern with the decreased skilled labor pool magnified by the increased number and size of certain projects.

Interest rates continue to remain at elevated levels and this combined with the recent banking crisis has created some budget and funding challenges, resulting in schedule pushes and program adjustments.

Patrick Ryan, Executive Vice President for the Americas at Linesight, says, “While we are seeing a continued contraction of the U.S. construction industry, it has reduced in scale to an anticipated 1% for 2023. The longer-range forecast is more optimistic with a projected growth rate of 4.5% CAGR from 2024 to 2027, due to increased investments in the energy, transportation, and housing sectors. As commodities continue to stabilize, we are more optimistic about the industry despite the short-term challenges being faced at the moment.”

The data in the report suggest that:

  • Lumber prices continue to fall in Q1 2023 with the average quarterly price down by 14.5% compared to Q4 last year. With weak output in residential construction, and ample supplies available, lumber prices will remain on a downward trend.
  • Steel prices came under renewed upward pressure in Q1 2023 having declined throughout the second half of 2022. Improved supply and weakness in the residential sector will be offset by increased spending on infrastructure and industrial construction projects and it is anticipated that flat steel will remain elevated in Q2 2023.
  • Diesel prices continued to fall in Q1 2023, with average quarterly prices dropping by 13% compared to Q4 last year, and in March prices were 27% lower than the July 2022 highs.
  • Cement prices have continued to increase in recent months. Despite weak demand in the residential sector, significant growth in the industrial and infrastructure sectors and high energy costs will keep prices elevated by circa 3% in the next quarter.

“We are looking at a much different – and much stronger – construction landscape than we were a year ago,” says Ryan. “There is certainly room for improvement, but our data shows that the perfect storm of the pandemic and fear of a recession are in the rearview mirror, and over the next year, we expect to see moderate growth, followed by even stronger performance over the next 3 to 4 years as the economy improves, and the demand for infrastructure grows.”

To request the full report, please click here.

About Linesight

Linesight is a multinational construction consultancy firm with over 48 years’ experience, providing cost, schedule, program, and project management services to a multitude of sectors including Life Sciences, Commercial, Data Centers, High-Tech Industrial, Residential, Hospitality, Healthcare, and Retail. Linesight’s specialist project teams, each with specific skills and experience, provide better predictability of project outcomes, faster project delivery, greater cost efficiency, and maximum monetary value for its clients. For further information, please visit


Cameron Thomas – Media Contact – – (416) 660-9801

Source: Linesight