Beyond the Build

Commodities Pricing

On the Radar: Construction in 2013 and Beyond

With 2013 only a few days away, it seems like everyone’s looking ahead. Here’s a snapshot of what we’re seeing going into next year.

Fewer subcontractors and vendors. This is a direct result of the Recession. I can say with certainty that those who have survived are stronger.

Pricing pressure. If the economy expands next year and more projects are put in the pipeline, there will be upward pricing pressure and even spot shortages as the sub/vendor backlogs increase.

Political uncertainty. Even after the November results came in, politics appear to be a factor in projects being delayed. We believe there is pent-up demand, and 2013 could be a very good year if market confidence increases.

Cost stabilization  Commodity pricing and a general global oversupply of raw materials should keep key cost for construction materials in line, at least through the second quarter of next year. In the 4th Q of 2012, there were not nearly as many “courtesy notices” regarding material price as we normally see. For details, I’d suggest “Oversupply Buries Raw Material” from the Wall Street Journal.

Overall, we are seeing hopeful signs for the construction market in 2013 with several nice projects in the queue. What trends are surfacing in your business?

(Our outlooks for 20122011 and 2010)


Merrill Stewart Jr.

Merrill Stewart is Founder and CEO of The Stewart/Perry Company, a commercial building contractor based in Birmingham.