Key Takeaways:

• $3.75B of construction was started in key sectors during 2021, an increase of almost$1B compared to 2020. Construction lending patterns and architectural billings suggest growth will continue.
• Pervasive material pricing volatility, increasing construction starts and supply chain pressures resulted in a noticeable increase in construction pricing during 2021. Suppliers of some products were at times not holding pricing commitments and/or lead times resulting in construction delays and cost increases. These realities will likely continue to exert upward pricing pressure and uncertainty in 2022.
• LCK Construction Tip: Engage contractors during design and plan procurements early. Flexibility in material selections and construction methods is a must to optimize budget and schedule compliance. Adequate owner contingencies must be planned in project budgets to avoid significant cost overruns.

Overview

Construction Starts: Statewide construction starts across six key sectors totaled $3.75B in 2021, an increase of $922M as compared to year-end 2020. Starts in the manufacturing sector increased significantly at $549M in 2021 vs. $126M in 2020. The healthcare sector had the lowest dollar value of construction starts, almost $90M less than government buildings. An increase in construction dollars spent in the healthcare sector is expected during 2022. ​

Construction Workforce: According to the Bureau of Labor Statistics, as of December 2021, there were 107,800 construction employees in South Carolina, 2,300 more than December 2020. The construction workforce experienced month-over-month growth during the first eight months of 2021 achieving a high of 110,200 workers in August. A shortfall continues to exist in resource availability to fill position vacancies across the design and construction sectors. ​

U.S. Material Pricing: Construction material pricing volatility was pervasive across all tracked materials during 2021. The average month-over-month percent increase for nineteen materials from January-December 2021 was 5.8% with no decreases. Average monthly increases above 10% were reported for diesel fuel, steel mill products, steel pipe & tube, and pre-engineered metal buildings. Average monthly increases above 5% occurred in structural steel, sheet metal, gypsum products, and plastic construction products. Pricing growth did slow during the fourth quarter with month-over-month percent increases averaging 4.28% and three materials showing decreases.