Vermeulens Releases Q3-2021 Market Outlook

Published 11-10-2021

Vermeulens has released its market outlook report for the third quarter of 2021. Key points include:

  • Construction prices rose in Q3 2021 at 0.5% per month.
  • Supply chain shortages and short-term spikes are impacting bottom-line construction costs; we recommend budgeting a bidding contingency in the order of three to five percent.
  • Fed Watch: The Federal Reserve continued monetary stimulus in line with the “new normal” and provided more specific indications on time horizons.
  • Architectural billings continued to grow steadily in Q3 despite lower growth in inquiries and contracts.
  • Construction Dollar Volume: Residential construction continues to boom, reaching new highs in Q3. Non-residential construction is down 3% annually but improved 0.6% in Q3, while infrastructure spending is unchanged.
  • Construction Job Growth: Approximately 34,000 construction jobs were added in Q3, or +0.5%.
  • New York Stock Exchange price index growth moderated but reached new highs. Overall, the NYSE is up 27% from September 2020.
  • Growth in Employment: Monthly average job growth through Q3 was 0.55M, with most of the increase in July.
  • Gross Domestic Product: Initial GDP projections point to an annualized growth rate of 12.2% for Q3 2021.
  • Commodities: COVID‐19 projections, a declining USD, residential construction spikes, and natural disasters have created short-term price spikes in PVC and steel (particularly for non‐standard shapes) while lumber prices have declined.
  • Personal Consumption Expenditures (PCE) price index increased 3.6% year over year (August 20/ August 21) in line with the Federal Reserve's mandate to target long-term average inflation of 2% annually.

The complete Market Outlook Q3-2021 report is available from Vermeulens.

Related Organizations
Construction Cost Consultant and Market Analyst
Vermeulens