There's been a "steady return of demand for projects across most sectors of commercial work," says a new construction outlook report from JLL for the second half of 2021. But that success brings a problem of "above-average increases in construction costs."

"Through August, average final construction costs for a commercial project had increased 4.5 percent, and total cost growth by year end is likely to surpass 6 percent," the report reads. "A similar level of cost escalation, in the range of 4 to 7 percent, is expected into 2022," though the materials component of the estimate is "the lowest confidence forecast due to the wide range of inputs and global supply chains bucketed into a single category."

In the 12 months before August 2021, average material prices were up 23%. The up-and-down shifts in material prices are "unprecedented in contemporary history," the report states. Increases in lumber and steel prices are the largest since at least 1949, according to government data that doesn't go back further. Aluminum prices have increased the fastest since 1995, plastic since 1976, and copper since 2010.

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