As inflation rises across the globe throughout 2022 and into 2023, those in the construction market of engineering are particularly worried about negative impacts. In addition to inflation, supply chain difficulties also cause significant strain on construction markets.
Among the challenges, material pricing has escalated for construction on average by 30%. Aside from this material prices have been fluctuating and are generally volatile, putting a strain on the construction market. Rising energy costs means that renting machinery and transporting supplies and equipment also increases project cost.
In addition to material and energy cost fluctuation, material availability is also becoming a challenge. There are significant shortages in areas such as cement, ready mix, precast, timber, steel shapes, reinforcing steel bars, and drywall which increases the time needed and cost of each project.
Beyond materials, there is a shortage of skilled personnel in the construction industry, while skilled workers rightfully seek more pay due to inflation. All of these factors coupled with the continuing impact of the great resignation contribute to lowering profits in construction.