Supply Chain Shortages Continue to Trouble Contractors

By Katie Kuehner-Hebert | Oct 28, 2021
Men working at construction site.

Supply chain shortages for construction materials—exacerbated by continued spikes in prices—are wreaking havoc on projects.

Contractors are facing delivery delays for materials across the board, including electrical equipment, fabricated materials, HVAC equipment, PVC piping, steel, copper, drywall, lumber and transportation equipment, according to the latest supply chain update on price and availability by Gilbane Building Co. in Providence, R.I.

As such, prices continue to increase in all those categories and more. The one exception to this is lumber, for which prices have finally started to drop, according to the August 2021 report. Lumber prices fell 21.2% in July from a month earlier, 19.5% in August and another 2.2% in September, according to the Bureau of Labor Statistics’ Producer Price Index.

Material costs and supply chain issues remain a top concern for electrical contractors throughout the country, according to James Farrell, NECA’s executive director of government affairs.

“The delayed delivery times, combined with the price increases, are having a real impact on contractors’ ability to complete projects on time and on budget,” Farrell said.

Ken Simonson, chief economist at the Associated General Contractors of America, told Construction Dive that the greatest shortages continue to be steel, roofing and insulation materials. Indeed, contractors have had to wait up to 14 months for bar joists to frame roofs. Prices continue to rise as a result—for steel mill products, prices rose 10.8% in July, 5.1% in August and an additional 5% in September, according to the bureau.

“It’s a real strain to get the full project done and staying within budget,” Simonson said.

Contractors have been adapting by substituting materials, such as customized beams for bar joists, although the heavier material typically necessitates redesigning the other roof components, he said.

“While the contractor may save time in substituting materials, they have to get the project manager to agree to a redesign and a higher expense, which may not always happen,” Simonson said.

Even then, substitute materials are not always available, due to pandemic shortages and bad winter storms shuttering raw material plants for a time, he said.

Contractors are generally having to eat the costs, Simonson said. Input costs to construction rose 28% from April 2020 to August 2021, while bid prices only rose 5% during the same period.

Supply chain issues will not be going away soon, and could very well last into 2023, he said.

“I think it will be a very long time before we see things get back to whatever normal was before this,” Simonson said.

About The Author

KUEHNER-HEBERT is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience. Reach her at [email protected].  





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