One of the major headlines in 2020, in construction, that did not directly involve the coronavirus, was the dramatic increase of lumber prices across the country. From April to September 2020 alone, general construction lumber prices increased 130%. Specific types of dimensional lumber increased as much as 158%. And while prices corrected slightly in the beginning of the fourth quarter of 2020, at the end of the year, prices were back on the move upward.
There are dozens of articles that discuss the economics behind the price increases, corrections and rebounds, but using those to predict where material prices are going or to change estimating or budgeting metrics is only half the battle. Most construction projects take longer than couple of days to estimate, sell and perform. Where that process takes months or even a year, contractors and subcontractors need a mechanism to seek compensation for cost increases.
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