Global Construction Consultancy firm Linesight sees Flattening Commodity Prices in 2023, with Inflation and Energy Prices Preventing Declines

Risk mitigation and smart procurement remain a must as an anticipated recession, growing demand for materials, and specialist labor shortage promise volatility despite normalizing supply chains

VANCOUVER, British Columbia--(BUSINESS WIRE)--Global construction consultancy firm, Linesight, today released new data indicating the likely leveling out of prices in key commodities markets as supply chain disruptions ease and logistics return to a more normalized level. However, the company’s Q4 2022 Commodity Report warns that continued inflation and a predicted economic downturn will keep prices high for the time being. Recovery in Canada is expected to fluctuate, dropping to 1.5% in 2023 after rising to 3.5% in 2022.

Patrick Ryan, Executive Vice President for the Americas at Linesight, says, “High inflation pressures, lower consumer spending, and high interest rates are all weakening the Canadian economy in 2023. Thankfully, inflation is expected to ease throughout 2023 due to improvements in the global supply chain and a tightening of fiscal policy. While general unemployment may rise in 2023, the construction industry is still facing a shortage in core skilled construction labor, resulting in stable labor costs through 2023.”

Some key commodities findings in the report include:

• Canadian lumber prices have continued along a slight downward trend over the past quarter as demand has remained subdued. Due to a high dependence on US exports (85% of the US softwood imports are sourced from Canada), prices are linked to the US housing market, which is facing a prolonged downturn.
• Hauler strikes and a shutdown of major plants due to fires reduced cement supply in mid- to late-2022. Supply has gradually recovered, and stocks have been replenished while intensive demand from the housing sector has subsided.
• Although demand from the residential sector has subsided, energy prices have contributed to the high price of concrete blocks and bricks, which may continue to rise thanks to elevated oil and gas prices over the next quarter.
• Canada produces roughly 50% of the North American steel supply, but with supply-side issues easing and inventories stable, demand-side uncertainty has weakened prices.
• Anticipation of a global recession has hurt copper demand, though prices have picked up partly owing to political and social unrest in significant sources like Chile and Peru.

“Residential construction will likely slow in 2023 due to overall economic sentiment and an increase in interest rates,” says Ryan. “The Canadian government has announced a number of major infrastructure projects including road and light rail work in major metropolitan areas, which should help offset some of the slowdown in other areas of the construction industry. Companies looking to navigate today’s volatile market should seek the best advice available.”

To request the full report, please click here.

About Linesight

Linesight is a multinational construction consultancy firm with over 48 years’ experience, providing cost, schedule, program, and project management services to a multitude of sectors including Life Sciences, Commercial, Data Centers, High-Tech Industrial, Residential, Hospitality, Healthcare, and Retail. Linesight’s specialist project teams, each with specific skills and experience, provide better predictability of project outcomes, faster project delivery, greater cost efficiency, and maximum monetary value for its clients. For further information, please visit http://www.linesight.com.