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How to mitigate material increases within construction industry

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How to mitigate material increases within construction industry

The construction industry is facing a significant challenge due to the ongoing increases in material costs. The prices of materials such as lumber, steel, and concrete have seen an unprecedented surge, leaving companies struggling to stay within their budgets. In this blog, we will explore the reasons for these increases in costs and how companies are mitigating them.

Causes of Material Cost Increases

Several factors have contributed to the recent increases in material costs in the construction industry. The COVID-19 pandemic has caused disruptions in the global supply chain, leading to shortages of raw materials and shipping delays. The increase in demand for construction materials has also caused pressure on the limited supply, leading to price hikes. Tariffs and trade policies have also impacted the cost of raw materials such as steel and aluminium, resulting in higher prices for these materials.

Mitigating Material Cost Increases

To mitigate the effects of the material cost increases, construction companies are adopting various strategies:

  1. Early Procurement

Construction companies are adopting a strategy of early procurement, purchasing the required building materials well in advance of the construction start date. By doing this, they can avoid the risks associated with supply chain disruptions and price hikes. Companies are also securing their supplies by signing long-term contracts with suppliers to guarantee availability and price stability.

  1. Value Engineering

Value engineering involves finding ways to reduce costs without compromising on the quality or performance of the building. Construction companies are reviewing their plans and specifications to identify areas where cost savings can be achieved without sacrificing quality. For example, some companies are reducing the thickness of walls and floors, using less costly materials such as plywood instead of solid wood, and opting for less expensive finishes.

  1. Alternative Materials

Construction companies are exploring alternative building materials that can be used in place of traditional materials that have experienced significant cost increases. For example, some companies are using alternative materials such as cross-laminated timber (CLT) instead of steel or concrete to save on costs. CLT is a sustainable and renewable material that can be used to construct tall buildings, providing a viable alternative to steel and concrete.

  1. Negotiations with Suppliers

Construction companies are also negotiating with their suppliers to secure better prices for building materials. By building strong relationships with suppliers and working closely with them, companies can often achieve lower prices and better terms. Many companies are partnering with suppliers to develop new products, find ways to optimize the supply chain, and reduce costs.

  1. Technology Adoption

Technology is playing an increasingly important role in mitigating the effects of material cost increases. Construction companies are using software and tools to optimize their supply chain, track material usage, and monitor costs. By doing this, they can identify cost-saving opportunities and improve their overall efficiency.


The increases in material costs in the construction industry have posed a significant challenge for companies, but by adopting strategies such as early procurement, value engineering, alternative materials, negotiations with suppliers, and technology adoption, companies can mitigate the effects of these increases. It is essential for construction companies to remain agile and responsive to changes in the market, embracing new materials, technologies, and approaches to stay competitive and achieve their goals.