Construction industry reeling from lack of materials and increased costs

The current economy with supply chain disruptions and increased costs of materials is a “nightmare” for the construction industry.

David Sload, president and CEO of Associated Builders and Contractors, Keystone Chapter, Inc, said the “nightmare” problem is twofold.

“The first is the ability to get materials and equipment,” he said. “The second is being able to depend on firm pricing.”

Daniel Durden, CEO, Pennsylvania Builders Association, agreed. “In the last 18 months, prices have increased, and products are less available creating longer wait times for projects.”

In fact, he said, some materials have gone up 19% over last year.

Sload said the problem stems from the manufacturing facilities being shut down during the pandemic and the inability to get raw materials from overseas now that manufacturing facilities are up and running.

“This is making it hard for contractors to put bids together,” Sload said. “Manufacturers will only hold a price for a certain window. If the materials aren’t available, they can increase the price,” he said.

Contractors have to build in the projected cost of the materials, which can lead to too high a price for a job, Sload said.

Brett Calabretta, vice president of Warfel Construction, East Petersburg, said his teams have been asking frequent and pointed questions to customers while planning jobs so they can be prepared to choose alternative materials if necessary because the timeline of the job is set before a project starts.

“There are still influencers that we encounter that are out of our control,” he said. “Like the war in Ukraine. Our job is to ask the right questions to develop alternatives to put our clients in the best situation possible.”

Still, according to Sload, those that have bid jobs at the beginning of the year are seeing many of the jobs costing more than they are making, causing them to eat the costs.

“I had a builder tell me the supplier told him the quote for lumber would only be good for as long as it took him to open the email,” Durden said.

He explained that the war in Ukraine and the tariffs in China are creating a shortage of raw materials and fuel.

“We can’t get lumber from Canada, so the price of domestic lumber has gone up day to day. If contractors can’t make money, they won’t build,” he said.

Calabretta agreed that materials are not available when needed. “Electrical components can take up to a year to get,” he said.