North America

Things we will see in the 1st Q of 2022:

USA, CANADA, and MEXICO are forecasted to see between 3.5% & 4.7% GDP growth in 2022.

It looks like there will be more infrastructure projects in the USA in 2022. Unfortunately, The USA has seen more than 820,000 + related deaths from the pandemic.

Escalation in the USA is more than 7%, Canada is seeing an 18 year high at close to 5%, and Mexico is seeing 7% – a 20 year high. This could be a problem in 2022.

The USA, Canada, and Mexico are gradually recovering from the pandemic. The impact of the new COVID-19/OMICRON strain on the construction sector has yet to be determined.

In the USA, research of the impact of COVID-19 to project budgets and schedules related to industrial plant developments indicate that costs will increase by 5% to 15% from pre-COVID-19 levels.

  • Lumber/Plywood/OSB in some cases increased by 100%. The outlook for 2022 is positive, and we expect current pricing levels to trend downwards.
  • Concrete (Ready Mix) + 3.5% in the last 12 weeks.
  • Formwork + 10% to 15% in the last 12 weeks.
  • Bricks/Concrete Blocks + 5% in the last 15 weeks.
  • Pipe & Fittings (CS/SS) + 1% to 20% in the last 3 months.
  • PVC Pipe and Fittings + 3% in the last 10 weeks.
  • Concrete blocks and bricks increased by as much as 10%.
  • Structural steel and rebar increased by as much as 65%, and prices are trending downward; however, these steel products remain volatile.
  • Copper cable and piping jumped as much as 45%, but these products are now trending downwards.
  • Roofing Products and Windows have risen by as much as 15% in the last 12 months.
  • Paint/Coating Products have increased by 12% in the last 12 months.
  • Windows now take up to 12 to 18 weeks to deliver to site, up from 6 weeks. Delivery in the USA and Canada is a big problem; (for example, a $3 million window order for a large hotel project) contractors cannot close up buildings to perform painting/flooring and finishes due to difficult weather conditions.

 

There are indications that the COVID-19 epidemic is starting to wane, but we are not out of the woods yet. A third COVID/OMICRON wave is a distinct possibility in the USA, Mexican states, and Canadian provinces.

A full US economic recovery will take at least 6 to 12 months to return to pre-COVID-19 levels. The good news is that the USA, Canada, and Mexican economies are starting to see growth as we move into the first quarter of 2022.

The majority of Refinery, Power, Manufacturing, Pharmaceutical, Food Production, and Owner related companies include clauses or contractual language in their construction contracts. Requests for Proposal (RFP’s) minimize the spread of COVID-19 within their production sites/campuses. Most of these contractual requirements will impact construction productivity.

Unfortunately, COVID/OMICRON has put a lot of small/mid-sized A/E’s, contractors, sub-contractors, and vendors out of business. Cash flow problems and lack of work are the reasons for this situation.

 

The Canadian economy and construction sector were severely impacted by the pandemic; this and low oil demand and deteriorating prices. However, the recent spike in oil prices is somewhat good news for the Canadian oil patch. The pandemic will hopefully fade away in the next 6 to 12 months, Canada is currently experiencing a housing boom, and the rest of the construction sector will remain flat for the next 3 to 9 months.

 

Mexico has seen over 4 million confirmed COVID cases and more than 300,000 related deaths due to the virus, but a recent report indicated the number of deaths is closer to 400,000. Like its two northern neighbors, the Mexican economy and construction sector struggled with the pandemic. A sustained economic recovery will take anywhere from 6 months to 12 months to achieve.