Experts: Construction material shortages to continue in 2021

Commercial contractors continue to battle material shortages brought on by the coronavirus pandemic, according to the Q4 2020 Commerce Commercial Construction Index.

The difficulty in procuring some construction materials and the cost associated with shortages won’t go away anytime soon, experts say.

The three big drivers — backlog, revenue expectations and contractor confidence — in the business group’s report “nudged up” slightly from the third quarter, but failed to reach pre-pandemic numbers. All three CCI scores were 70 or above in Q1, before the pandemic began to impact material shortages.

According to the report, 71% of contractors surveyed are facing at least one material shortage. Timber was the most-cited material shortage (31%), followed by steel or electrical supplies other than copper wire (11%) and lighting supplies (10%).

Fuel, copper, steel and aluminium have each experienced modest price increases, while concrete’s price has slightly decreased. Additionally Contractors have received notifications of further material and equipment price increases for 2021.

Timber prices have done an “N-turn,”, rising rapidly like they did in the summer. In early December, the Commerce Department lowered the tariff on Canadian-imported Timber from 20% to 9%, which could impact pricing. However, increasing demand from home builders and extensions could keep costs higher.

The shortages are impacting not only costs but lead times. Price increases for materials like scrap steel and plasterboard are expected to continue into 2021.

“Material availability is best managed through ongoing communications with manufacturers and distributors starting at the earliest design stages of a project,” he added.

The Chamber of Commerce's quarterly report also shows contractors face increasing challenges due to COVID-19:

• 82% experiencing product delays.

• 70% struggling to meet programme requirements.

• 67% experiencing delays expected into Q2 of 2021.

• 57% putting in higher tenders on projects.

• 52% saying major project shutdowns/delays are a top concern.

• 40% saying material shortages is a severe consequence of COVID-19.

• 38% turning down work opportunities.