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Regional contractors report that their backlogs are up, but inflated prices complicate preconstruction and procurement efforts.

Construction starts are once again increasing after a slowdown in the fourth quarter of 2021. But labor shortages continue, and after a brief decline, materials prices are again climbing, caused partially by the war in Ukraine.

Although ENR’s indexes measure the costs of non-residential buildings, the housing market has had a major impact on index movement.

With first-quarter construction starts trending above 2021 activity, the industry’s need to attract and retain talent is on the rise as well.<

Contractors hoped a return to a pre-pandemic materials supply free of logistics bottlenecks would come in early 2022, but then Russia invaded Ukraine.

The construction equipment sector is still working through supply chain issues that bedeviled it in 2021, while an active construction market ikeeps machines in use longer and constrains the flow of used iron into the normal secondary channels.

ENR’s Construction Industry Confidence Index remained steady in Q1, rising slightly to a rating of 61, a one-point bump from the final quarter of 2021. The index had fallen the previous two quarters. 

As the height of the pandemic continues to recede, contractors still face several ongoing issues, including sky-high materials prices and staff shortages. 

Project news from Dodge Data & Analytics.

ENR’s 20-city average cost indexes, wages and materials prices. Historical data and details for ENR’s 20 cities can be found at ENR.com/economics