By Catherine Sweeney
January 21, 2022
Over the course of the COVID-19 pandemic, the construction industry has been faced with a myriad of challenges, from global supply chain issues causing an increase in material costs to a lack of labor. However, according to a national fourth quarter construction report from construction management company Cumming Group, 2022 will likely see prices begin to decline to normal inflationary rates as issues begin to resolve themselves.

In 2021, the construction industry saw its largest increase ever recorded – an increase of 18.4 percent. In addition, global consumer price inflation picked up from 2.2 percent to 3.7 percent year-over-year. However, Cumming’s Executive Vice President Mark Fergus said this is likely to stabilize throughout 2022, with the report showing consumer price inflation easing to 3.5 percent in 2022 and even lower in 2023, to 2.7 percent.

“We’ve seen some really erratic pricing in the last few quarters of 2021, and this is largely a combination of the engine starting to rev back up again and the lack of supply to the demand,” Fergus said. “Although, we have seen the pricing starting to get back into alignment with where we were pre-pandemic, and I think we’re going to see a bit more of that. Also, there’s an underlying consumer price inflation that is driving certain markets as well and that’s increasing cap rates. It’s still really complex, and I think that’s going to continue for a while.”

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