As we reported in late 2015, glass supply is quickly falling behind demand. As starts skyrocket, so do glass prices; curtain-wall prices have risen more than 30 percent in the past 18 months, as previously shuttered glass manufacturers struggle to keep up with demand. Real Views took a deeper dive into the subject with the latest JLL Construction Perspective:
Urban skylines sparkle with skyscrapers covered in hundreds of thousands of sheets of floor-to-ceiling glass.
Yet, all that glass comes at a price—a price that has risen sharply as demand has outstripped supply. A glass shortage, combined with a lack of skilled construction workers, is proving to be a headache for construction project managers trying to stay on-time and on-budget.
2015 was a banner year for construction activity, according to JLL’s latest report on U.S. non-residential construction activity. Office space under construction peaked at 92.8 million square feet and industrial construction exploding as consumer confidence grew. Modern skyscrapers, apartment buildings, luxury homes and even some industrial facilities are typically built with metal-framed float glass panels—known as curtain wall—that allow for natural light to permeate the spaces within. Not only is glass aesthetically appealing, but a glass wall can be installed more quickly than a traditional masonry wall, making it integral to the development of corporate real estate. That is, until recent glass and labor shortages slow down construction.
Lengthy construction delays and high prices for glass can add millions of dollars to the cost of a skyscraper. Curtain wall prices have risen by more than 30 percent in the past 18 months, and the wait for product can last months, thanks to a production shortage. In fact, some high-rise office and residential projects have been delayed by nearly a year because of the shortage, which also creates issues beyond pure cost. Meanwhile, U.S. construction wages rose by 4.2 percent between 2014 and 2015 as developers searched for labor.
Now for the good news
Counterbalancing rising glass and labor costs are falling prices for other construction materials, particularly steel because of a glut of foreign-made steel entering the global market last year. Other energy-intensive products are benefiting from record-low oil and gas prices.
Read the entire article here.
View the JLL Construction Perspective