What is going on in the pre-engineered building (PEMB) marketplace!
Updated: Jul 25
Careful with your Value Engineering!
Reports from manufacturers indicate 50 week or longer lead times, and pricing at double or more of 2019 and 2018 levels. Like the rest of the industry, PEMB is suffering supply chain issues, but there is a bigger story.
Reports of steel shortages and price shocks for industrial buildings of all types indicate something going on. Anecdotal stories suggest that an increase in industrial building is at fault, however new industrial and warehouse building construction is up only slightly overall, and much of that increase can be attributed to higher cost, and not increased activity. Steel price increases provide some light – Steel mill products used in construction are up substantially since 2020. Light gauge steel or cold rolled, is used heavily in PEMB construction to make the insulated panel skin of these buildings. The steel price increase is only a fraction of the total increase in PEMB building cost increase.
PEMB pricing tends to increase at a faster rate during periods of high construction inflation than the general marketplace. When predicted costs for more standard industrial construction increase beyond budgets, some projects will shift from standard construction to PEMB. The relatively low capacity of PEMB manufacturers however can’t easily expand to meet the increased demand resulting in higher pricing and longer lead times.
The combination of steel pricing and increased demand with restricted manufacturing capacity for the PEMB manufacturers is providing significant challenges in the PEMB market, and eroding the potential savings for building owners considering a PEMB in the near future.