The Construction Materials Shortage

The Story So Far ^[1]

COMMENTARY

By Eric Solberg +

USA

Due in part to the COVID-19 pandemic, more people want to build a new home, move somewhere larger, or renovate than ever before. As a result, there is a huge demand for homes and building materials. However, there is also a shortage of various construction materials, as you might already be well aware. If you’ve been to a hardware store or home improvement supercenter recently, then you can practically see the costs go up before your very eyes.

This important issue has a broad impact and will also have long-term economic consequences. Yet how did we get here? What is being done to counteract the shortage? What can be done by either individuals or governments? And how much longer can we expect higher prices and reduced access to continue? We cannot hope to explain everything in a single article, but we can shed light on the story so far and give some insight into where it might be going.

What’s the Problem?

Over the past year or so, lumber prices have skyrocketed, and even finding the stuff can be difficult. Also, add to the difficulty of finding the exact lumber needed (you can’t just substitute one type of wood for another). While contractors and sawmills are doing their best to make do or increase production, it currently isn’t enough. Even if some prices are down from their peak earlier this year, they are still debilitating to many.

Steel has also risen in price and become less available, which is just as impactful. Given the amount of steel used in practically everything, particularly larger buildings and construction projects, infrastructure worldwide is being affected. Public works and construction budgets are heavily impacted, and the extra costs have to be dealt with somehow, meaning delays, cuts to other things, or increased taxes.

On the private end, which we will go into a bit more detail about later, construction costs are skyrocketi0ng just because of the materials needed. Labor is also an issue (especially skilled labor) due to increased demand. Nonetheless, the real impact has been these materials shortages. While the market often sorts itself out, the product or service in question here is living space, having severe consequences for people’s daily lives.

The contractors, who generally feel the biggest impact and buy the materials (whether for themselves or their clients), are noting serious material shortages. At least one thing they need for the project is missing, most likely lumber or steel. Lighting supplies or certain types of wiring are also in short supply, though the problem isn’t as acute. Contractors have to pass on the costs to their clients or suffer huge losses.

So why not just make more lumber and steel? It sadly isn’t so simple. The production chains are relatively complex, and the materials must be shipped and processed from place to place. There could be delays in those shipping lanes, especially if overseas or lengthy travel is involved, and the end products still need to be shipped around the world. As we will highlight later, simply increasing production takes time as well…

More…

To read entire article, click here

How to cite this article: Solberg, E. (2021). The Construction Materials Shortage: The Story So Far; Commentary, PM World Journal, Vol. X, Issue XI, November. Available online at https://pmworldlibrary.net/wp-content/uploads/2021/11/pmwj111-Nov2021-Solberg-the-construction-materials-shortage.pdf

About the Author(s)

This article was composed by multiple contributors to Conexboxes.com.  It was coordinated, organized and edited by Erica Solberg. Erica has 6 years of experience in the distribution and shipping industries. More recently she has been blogging and writing on relevant developments, with a particular interest in the supply chain in the shipping sector.

For more information or to contact the authors, visit conexboxes.com

[1] This article first appeared on https://conexboxes.com/blog/construction-materials-shortage.