By: Adam R. McManus
June 24, 2021
We are well into the year of 2021 and still feeling the impact in the construction industry after at least one solid year of tight Covid restrictions in the United States. The southern United States has led the way in 2021 with the opening of the states and returning to business by the lifting of most of those restrictions. The coastal northeast, northwest and some of the larger cities have lagged behind the South on fully pulling back the restrictions. Many reports over the past few months have indicated that we may be facing “historic” shortages in construction materials. For those who will be facing material shortages, the Engineers, Architects, Contractors, Manufacturers, Distributors and Owners will benefit from improved communication and a keeping a close tab on the unforeseen materials debacle.
While in the process of returning to normal, it cannot be overlooked that many corporations were in diminished production of manufactured goods and services rendered during the shut-down period. In the construction industry, we have seen the demand for construction materials return to pre-Covid levels, but the construction, at this point, has outpaced the material production and delivery. There is also some pent up need to make up for the deferred construction projects from 2020.
Recently, materials such as dimensional lumber, rigid polyisocyanurate insulation for roofing, adhesives, metal containers and a myriad of other similar products are on the list for shortages and lengthy delays. The most common statement among distributers and manufacturer’s representatives, is that they do not know for certain, when the next arrival of materials will be. Recent orders for roofing insulation for instance has anticipated delivery dates in the 4th quarter of this year. The high demand and uncertainty in the production levels has driven the cost to historic price levels, at least in the short term. It is difficult to be mid-year with construction projects underway and stay ahead of the projected shortages. This will likely impact construction schedules in 2021, to some degree. It is unclear at this point if the corrections and catchup time in production will be able to close the gap fast enough before putting a negative outlook for the remainder of the year.
There have been reports from several roofing and stucco system manufacturers that certain imported materials such as chemicals, have not been readily available and these are components for products that have made the shortage list. Recently, we have had to consider alternative products that are available but more costly. The conversation with the clients and contractors has to address how the remainder of 2021 can be navigated with projects already underway.
In the past couple of weeks, there have been
reports that lumber production has increased along with an increase in deliveries and the prices have begun to drop. Any positive report that there is a correction in the material production to meet the high demand, is a welcome sign. There has also been reports of some inflated orders from distributors in an attempt to stay ahead of the shortages. This has complicated the accuracy of some of the material shortage projections, because it may look a little like the hoarding phenomenon of toilet paper back in 2020.
The Owners should consider whether they want to pay a premium for some product alternatives, or possibly rearrange some phases of construction until materials are readily available again. It is to be seen whether the construction delays can be overcome during the summer months or if there will be reverberations that cause project schedules to be elongated to make up for the immediate lack of resources.
We recommend that once a contract is executed, that the contractors place job-specific orders for materials. It has been reported by distributors and manufacturers that specificity to particular projects elevates those orders to a higher level of priority.