2024 Retail Fit Out Cost Guide

COMMODITY COSTS ARE LEVELING OUT

Commodities are one of the major components of construction costs. Peak pandemic cost increases were primarily driven by sharp increases in commodity prices. At year-end 2023, commodity price growth decelerated and is well below pandemic highs. Lumber has experienced the most significant change in price, falling 4% YOY. The near-term forecast calls for lumber prices to increase 4% by year-end 2024 from current levels, in line with its 10-year average of 3.9%. Copper and aluminum experienced the largest pandemic increases, but both have fallen from those highs. Copper prices were down 3.5% YOY, below its 10-year average of 2.4%. Prices for aluminum rose 4.0%, slightly below its 10-year average of 4.3%. The forecast calls for copper to increase 6.2% and aluminum 6.1% by year-end 2024.

Glass prices increased slightly at 2.4% YOY and are expected to rise at 2.1% by year-end 2024, which is nearly half the 10-year annual average. Prices for concrete grew 8.2% YOY, but that growth is expected to slow to 4.3% by year-end 2024, slightly lower than its 10-year average of 5.1%.

KEY TAKEAWAY

Pandemic-fueled increases have abated, but strong demand continues to apply upward pricing pressure on many commodities. Copper and aluminum prices are both expected to grow in 2024.

YOY INCREASES ARE MORE IN LINE WITH THEIR 10-YEAR AVERAGES INCREASES HAVE SLOWED FOR MOST COMMODITIES

YOY Pre-Pandemic (Jan 2020) 10-yr Average 2024 Forecast

80%

64%

60%

45%

37%

40%

24%

22%

20%

8%

6%

6%

5%

4%

Percent Change

4%

4%

4%

4%

4%

2%

2%

2%

0%

-3%

-4%

-20%

Lumber

Copper

Aluminum

Glass

Concrete

Source: U.S. Bureau of Labor Statistics (BLS); Moody’s Analytics Forecasted

8

Cushman & Wakefield