b'COVER STORYsteel pipe, aluminum, fuel, glass, AFTER MORE THAN 10 YEARS OF STABLE PRICING FOR WOOD,insulation materials, gypsum and paints, with increases from 10 to 80 per cent. STEEL, CONCRETE AND OTHER KEY MATERIALS, SUPPLY CON- According to Carrick, factors associated with the pandemic, such as shortages of CERNS ERUPTED IN THE FIRST MONTHS OF THE PANDEMIC ASmaterials and labour, wages increasing to attract domestic workers (i.e., eliminating uncertainty of offshore FACTORIES AROUND THE WORLD WERE CLOSED BECAUSE OFsupply), and deglobalization as countries look at national materials sourcing and COVID-19. THIS LED TO A PRICING SPIKE IN MATERIALS THATstock piling, point to longer-term higher pricing, especially for raw materials.WORSENED AS THE INFECTION WAVES CONTINUED INTO 2021 Add to that the governments adoption of environmental programs such as electrification and decarbonization, and it further complicates things. These greenhouse gas reduction initiatives will put more pressure on commodity pricing as well as cleanup costs of mandated March 2021. Fourteen of the 21 productFor example, declining lumber pricesindustrial sectors. The negative impact groups showed increases. In addition towere expected by most experts asof higher pricing can be seen in the wood, energy and petroleum (+32.4 perannualized housing starts and theU.S. bid and materials indexes, says cent) and primary non-ferrous productssummer renovation market declinedCarrick. In 2021 to date, the bid index (+29.3 per cent) accounted for thein 2021. A review of the entire lumberhas increased by five per cent while the majority of the index increase. sector shows pricing beyond softwoodmaterials index is up 25 per cent.The July 2021 IPPI showed a monthlylumber continues to increase. PlywoodCarrick goes on to say that there is a decrease of 0.4 per cent but still had aand particle board have increased morebright light amongst the darkness of year-to-year increase of 15.4 per cent.than 100 per cent over the last year. increased commodity prices. Canadian Seventeen of the 21 groups recordedraw material providers will need to invest increases. Lumber had a second monthThe steel sector has increased over in new material sources (i.e., mines, etc.) in a row of declining prices; the softwood43 per cent year over year, and iron andto meet the increasing demand. This sector dropped a record 37.6 per cent.steel scrap has increased more than will generate new mega construction This decline reflected lower demand for100 per cent. Other materials includeprojects that have not occurred for more housing in the U.S.Iron and steel sector prices were up 5.9 per cent for the eleventh consecutive monthly increase and a year-to-year increase of 50.9 per cent, the largest year-to-year increase on record. This shift in pricing was mainly driven by strong demand in China, according toStatistics Canada.Our ServicesThe July 2021 IPPI increase of 15.4Construction Managementper cent recorded 12 months of index increases from August 2020. This year- Integrated Project Deliveryto-date increase was driven by year- Design-Buildto-year price increases in energy andGeneral Contractingpetroleum (+46.9 per cent), iron and steel (+49.8 per cent) and lumber (+39.1 per cent), despite the drop in softwoodPLAN.Cost & Construction Advisorylumber prices. THE FUTURE PERFORM.Sector ExperienceThough the recent flattening of someInstitutionalcommodity prices may appear to be theINSPIRE . Commercialstart of a return to the old normal ofIndustrialconstruction material pricing, a deeperwww.gillamgroup.com Multi-Unit Residentialdive into the pricing landscape is needed to learn what the future may hold. BUILDERSDIGEST Quarter 3 202115'