Life Sciences U.S. Fit-Out Cost Guide 2023

LIFE SCIENCES FIT OUT COST GUIDE 2023

COMMODITY PRICES DOWN FROM PANDEMIC HIGHS

Supply chain constraints during the pandemic led to historically high commodities prices, which greatly impacted construction costs. As these constraints eased, prices for most commodities eased from peak levels, but remain elevated relative to pre-pandemic levels. Copper has fallen 11% from its pandemic high and is currently 8% lower year over year (YoY) as of the second quarter of 2023. While copper prices are steadily moderating, the forecast is for additional price increases toward the end of the year through 2025. Copper prices will face upward pressure from the increased demand of net-zero transitions globally, as copper is essential to the electrification of systems. Lumber costs are down 29% YoY as of the second quarter of 2023 and are 40% below pandemic and historic peaks. The current forecast calls for a leveling out of prices in the near term; however, the Canadian wildfires may impact pricing in the future as the effect is assessed. Steel prices underwent the greatest pandemic increase, rising 85% from the first quarter of 2020 to their peak level in the second quarter of 2022. Pricing has

slowly begun to recede from peak levels, falling 16% YoY as of the second quarter of 2023. Steel pricing is expected to level out in the near term.

KEY TAKEAWAY

Commodity prices have receded from pandemic highs. Lumber and steel prices are expected to level out. Increasing demand for copper, due to global electrification efforts, will apply upward pressure to prices.

COST INDEX FOR LUMBER, STEEL AND COPPER COMMODITY PRICES ARE MODERATING

Forecast

Lumber

Steel (Pipe and Tube)

Copper

800

-8% decrease YOY

700

600

500

400

-16% decrease YOY

300 Cost Index

200

-26% decrease YOY

100

0

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

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