Commercial contractors continue to battle various material shortages as a result of the coronavirus pandemic, according to the Q4 2020 U.S. Chamber of Commerce Commercial Construction Index. Furthermore, experts say that the shortages and difficulty in procuring certain construction materials, as well as the resulting cost increases, won’t go away any time soon.
These price increases and material shortages are having a direct impact on our industry, and must be planned for. Fuel, copper, steel, and aluminium have each experienced modest price increases, while concrete’s price has slightly decreased, according to Atillo Rivetti, VP at Turner Construction in NYC. He also reports that Turner has received notification of further material and equipment price increases to expect in the upcoming year.
Additionally, steel and lumber prices have also increased considerably, jumping up several different times this past fall, according to a report from Ken Simonson, chief economist for the Associated General Contractors of America.
These shortages are having an impact on not only cost associated with building materials, but also on lead times for projects. These price increases for items like scrap steel and gypsum drywall are expected to continue well into 2021.
The Chamber of Commerce’s quarterly report also detailed other challenges facing contractors as a result of COVID-19 including the following:
- 83% experiencing product delays
- 71% struggling with schedule requirements
- 68% experiencing delays expected to continue into Q2 of 2021
- 58% putting in higher bids on various projects
- 53% say major project shutdowns and delays are a big concern
- 41% say material shortages are a severe consequence of COVID-19
- 39% are turning down opportunities for work
Other concerns to be aware of are increasing transportation rates, and increases in labor costs, which are impacting the industry just as much as manufacturers pricing increases across the board. These issues are something to be aware of and plan ahead for, as key players anticipate a lot more of this in the coming year.