Return to Normal Hopes For Global Supply Chain Dashed by Russian Invasion of Ukraine
According to new research by Andrew Volz, JLL Construction Research Leader, broad U.S. economic recovery and a near-global end to pandemic-related restrictions generated an improved construction outlook in the early months of 2022.
However, lingering supply chain issues, international geopolitical conflicts, and elevated inflation have further stymied material availability and elevated costs. As these combine with continuing labor difficulties and forthcoming interest rate increases, construction volume may not recover at initially anticipated rates.
Volz further states that while unemployment rates have returned to near pre-pandemic levels, total employment in the construction industry has only just returned to pre-pandemic numbers and job openings are at record highs. Labor markets remain extremely tight in general.
Following unprecedented volatility in materials pricing in the last year, costs remain at historically high levels and face additional uncertainty. Continuing record inflation and extreme energy prices, the latter brought on by the invasion of Ukraine by Russian forces and subsequent sanctions against Russia, are likely to further drive record price increases for construction materials and to complicate global supply chain recovery, concludes Volz.