As we move further into 2025, one thing is clear: material pricing remains a critical — and often unpredictable — factor in construction supply chain strategy. Over the past 12 months, distributors, manufacturers, and builders alike have navigated a market shaped by cautious optimism, continued inflationary ripple effects, and evolving demand patterns.
While forecasts aren’t always perfect, they offer valuable insights — and this past year provided important lessons on how to approach material pricing with more agility, accuracy, and strategic foresight.
Here’s what we learned from the past year’s building material pricing forecasts — and what it means for the road ahead.
1. Forecasting Accuracy Improved — but Volatility Still Exists
In 2024, most pricing forecasts correctly predicted moderation in major commodity-based materials, such as lumber and steel. However, categories like concrete, asphalt, and insulation still experienced regional price spikes due to local demand and transportation issues.
Lesson Learned:
Even as forecasts become more sophisticated, local market intelligence is essential. National averages don’t always reflect regional realities.
2. Infrastructure Spending Remains a Major Price Driver
With government-backed infrastructure projects continuing to roll out, materials tied to public construction — like rebar, aggregates, and concrete — saw steady price increases and extended lead times in certain zones.
Lesson Learned:
Forecasts must factor in geographic infrastructure funding trends. Distributors near large-scale public works projects saw the most pronounced demand surges.
3. Labor Costs Influenced Pricing More Than Anticipated
One underappreciated driver of rising material costs was labor-related inflation — from manufacturing and logistics to delivery and warehousing.
Lesson Learned:
Materials pricing isn’t just about raw inputs. Labor constraints in the supply chain affect cost structures, and should be baked into future pricing models.
4. Freight and Fuel Fluctuations Had Lasting Impact
While fuel prices cooled from 2022 highs, freight surcharges and delivery costs remained elevated, keeping pressure on the total landed cost of goods — especially for bulky and long-haul materials.
Lesson Learned:
Forecasts that focused solely on base material cost missed the mark on total cost to serve. Transportation volatility must be part of pricing risk planning.
5. Seasonal Pricing Behavior Is Returning — But Gradually
Some predictability returned to markets like lumber and roofing materials, where seasonal pricing trends re-emerged. However, continued global uncertainty meant those patterns weren’t as reliable as in pre-pandemic years.
Lesson Learned:
While historical trends are useful again, forecasts must still include real-time adjustments based on climate events, shipping delays, or labor strikes.
6. Sustainability Regulations Are Increasing Price Pressure
An often-overlooked trend: materials aligned with new sustainability or emissions standards — such as low-carbon concrete, recyclable insulation, or EPD-certified lumber — saw higher price increases than their traditional counterparts.
Lesson Learned:
As ESG and green building policies evolve, compliance-ready products carry a premium. These categories should be tracked separately in forecasts.
7. Housing Starts Data Continued to Influence Demand – But with Delays
Forecasters that relied heavily on housing start projections found that demand sometimes lagged behind permitting. Delays in project timelines — due to financing or labor shortages — impacted real-time material pull-through.
Lesson Learned:
Housing starts remain a valuable indicator, but they must be balanced with contractor backlog, financing trends, and active jobsite data.
8. Forward Buying Was a Mixed Strategy
Some distributors successfully used forecasts to buy ahead and secure favorable pricing, especially in high-demand categories. Others over-purchased in categories that saw softening demand.
Lesson Learned:
Flexible procurement strategies — including tiered buying or short-term contracts — helped hedge risk better than large bulk purchases based on single-point forecasts.
9. Communication Around Pricing Became a Differentiator
Companies that proactively shared forecast-based insights with their customers (e.g., price trend reports, suggested timing for large purchases) built stronger trust and positioned themselves as strategic partners.
Lesson Learned:
Forecasts aren’t just internal tools. When shared thoughtfully, they enhance customer retention and sales credibility.
10. Forecasting Is Now a Continuous Process — Not Annual
Perhaps the biggest shift in mindset: leading companies no longer treat pricing forecasts as annual planning tools, but as dynamic, monthly decision inputs tied to sales, procurement, and operations.
Lesson Learned:
The companies that adapted fastest were those with real-time forecasting tools, cross-functional planning, and feedback loops.
Conclusion
The past 12 months taught us that material pricing forecasts are essential — but not infallible. The most successful companies used them as strategic guides, not fixed predictions. By combining national forecasts with regional insights, supply chain data, and flexible procurement, distributors can prepare for whatever comes next.
In 2025 and beyond, success won’t come from guessing right — it will come from adapting fast.
