Much information has been written about the supply shortages that general contractors are experiencing for their projects. For example, according to the Q4 2020 “Commercial Construction Index,” published by the U.S. Chamber of Commerce, 71% of contractors are facing at least one material shortage. In first place is wood/lumber (31%), followed by steel (11%).
However, also tied for second place are electrical products (excluding copper wire) at 11%, closely followed by lighting products at 10%.
Not only are supply shortages a challenge, but prices for all of these products are also increasing. Copper, for example, now costs about double what it did a year ago, in part because copper mines are being depleted due to increasing demand and, at the same time, there is a lack of discovery of new deposits of copper to mine.
One reason for the increasing demand is the explosive growth of renewables projects in the United States and worldwide. Another is the fact that China is in a growth mode and has been buying up nearly all the available copper. It is currently consuming about half of all the world’s existing production. This demand is expected to continue into the near future.
Experts anticipate that the price of copper will surge to an all-time high in the next 12 months, resulting in further increases in the costs of copper wire and other supplies and equipment containing copper that are used by electrical contractors.
Additionally, as noted by the U.S. Chamber of Commerce’s Index, tightening supplies of lighting products are also becoming a challenge for electrical contractors. In particular, there is a shortage of LED supplies, which have been disrupted over the past year due to the pandemic-related slowdowns in production and shipping. Experts see a continued shortage in the coming months because it will take time for manufacturers to ramp up production and for the supply chain to get back to full strength.