Cement and brick prices remain elevated as steel and lumber costs ease

Construction material prices remain volatile with the cost of high-energy products remaining high, according to Linesight. 

The consultant’s latest commodity report showed cement and concrete were still expensive, while other materials such as lumber and steel declined in value, following demand. 

The pace of inflation for certain materials was slowed on the previous period, with copper prices easing after continuing to climb sharply in the first months of 2023. 

Having jumped up 7.8% from the last quarter of 2022 to Q1 of this year, prices of the metal are now forecast to decrease –3% over the coming year. 

Linesight’s UK managing director, Michael Riordan, said: “We are seeing an overall stabilisation of commodities from the extreme levels experienced last year, which is welcome news.   

“However, as we can see from this quarter, we are still dealing with a volatile market, sensitive to the geo-political environment, elevated energy costs and demand-supply impacts.   

“Downward easing of some critical commodities is being checked by demand spikes from mission-critical sectors such as data centres and life sciences, as well as the impact of China’s relaxation of its Zero COVID policy.” 

Steel rebar costs are projected to decline steadily by roughly 0.8% in the coming quarter, while lumber prices are set to drop 8.5%, having already gone down by 2.8% in the first quarter. 

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Diesel prices also continued to ease, dropping 7.6% in Q1 and predicted to drop 4.7% more in the coming quarter. 

Meanwhile, cement prices have already risen 6.1% this year and are projected to rise 5% further in Q2, with brick costs also set to rise by 1%. 

Linesight forecast tender prices to increase by 3.5% in 2023, with increases of 3% in both 2024 and 2025 before rising by 4% in 2026.  

These elevated costs, alongside high interest rates, are predicted to lead to a modest decline in output.