Material Prices Are Through the Roof
The construction industry is currently experiencing an unprecedented mix of sharply increasing materials prices, decreased supplies and staffing difficulties. The cost of many essential materials has been going through the roof. The spike in material costs that have impacted commercial buildings comes from wood, metal, rebar, and concrete. Wood has increased to new heights in 2021, and by the look of it, it’s not slowing down any time soon. Since April 2020, the price of lumber has jumped 375%. With the pandemic and increased demand from DIY projects and the housing industry, the mills can’t keep up. In April 2021, the average lumber price was $1,372 per 1,000 board feet.
Additionally, logistical and transportation challenges due to the COVID pandemic in 2020 have made significant building materials scarce. Due to trucking shortages being felt across the country, anything with substantial shipping and logistics components have caused lead time issues.
These kinds of lingering supply chain delays could end up slowing down the anticipated rebound in construction activity in the latter half of 2021, especially in markets where contractors face high material costs, a lack of supply, or both.
These price fluctuations can turn a good project with a feasible budget into one that unnecessarily stretches your resources. That’s why it’s truly important that your project continues to move ahead after the bidding phase without much delay. The longer the period that passes from your bid to the buyout of the project, the more there’s a chance for material prices to increase.
For jobs in progress, though, contractors will need to stay on their toes. Out of the box thinking and the readiness to come up with resourceful solutions to reduce costs while maintaining the integrity of the project are essential.
It is critical to be proactive. By getting ahead of price escalation and delivery delays before they happen, or at least quickly communicating them once they do, contractors can save a lot of headache for themselves and their projects. When you have a sixty day time line on certain types of installation, staying focused on the job progress schedule will be critical for your success.
Be safe, stay cool and enjoy the rest of summer.