It’s Just Not Shortages in Lumber and Sheathings
Builders, subcontractors, and consumers have heard a lot about the high prices and shortages in lumber and sheathings, and while those are huge issues, many areas of the building material supply chain are in shambles also creating substantial delays and much higher pricing. All should be cautioned that delays and higher prices are throughout construction projects and there are no short-term fixes or easy solutions.
Pent up and increased demand for housing by millennials, and years of trade policy disruptions exacerbated by the worldwide COVID-19 pandemic, have created major issues. Most fail to realize this is not temporary price gouging, but a systemic problem of lost manufacturing in the United States and the lingering effects of the housing bust of 2008. Due to long-term poor housing demand and corporate consolidation, the country does not have the manufacturing capacity to ramp up historical levels of housing demand. If housing demand remains strong, and the shifting demographics suggest it will, this could be a long-term problem.
Here are the top 8 major disruptions which are causing shortages and higher prices in other sectors of the building material supply chain that have nothing to do with lumber or sheathings.
#1 is Labor. A decade plus of poor housing demand has decimated the skilled workforce in America, and incoherent immigration policy has created huge gaps in skilled labor. Yes, construction academies like those in Lake County are springing up, but the growth of skilled workers in the construction industry will take years. Expect to pay higher prices for labor and wait longer for jobs.
#2 is steel. The consolidation of United States steel companies coupled with trade targeted steel tariffs has created a real shortage in steel. The emerging economies in China and India dwarf the United States population, and the demand for steel worldwide is growing rapidly. If the $1 trillion dollar infrastructure package is passed in America, who knows where the steel will come from to build these roads and bridges. Foundation rebar and mesh products have almost doubled in price, and the plates to make roof trusses are now on inventory allocation. You could have a harder time getting roof trusses later this summer.
#3 are electrical wiring products. Like steel, copper is in high demand and the United States does not have enough capacity. Expect to see much higher pricing in electrical wiring products as well as real shortages. Customers are already seeing prices double for electrical projects.
#4 is lighting fixtures. Since most lighting fixtures are imported and there is a shortage of steel and copper, lighting fixtures are becoming a real problem. Dont make the mistake of special ordering lights from overseas- you will be waiting a long time. Shortages and higher prices are here now.
#5 is plumbing supplies. Once again, world demand for the products to make PVC and copper pipe is extremely high and the country took a big kick in the chin in plumbing with the great Texas freeze in February. Plumbing pipe prices have doubled in some cases and the lead times are stretched out to unreasonable times. Plumbing fixtures, because of the metals used, are going up in price and availability is tight.
#6 are windows and doors. Windows in the state of Florida are a disaster. Lead times for windows by some manufacturers have stretched out 9 months which is not tenable. Prices are going up quarterly as aluminum and glass prices soar. Fiberglass and steel used to build doors is going up quarterly, and the many door companies have implemented allocations.
#7 is roofing supplies. If we get a major hurricane in Florida this year, expect to see blue tarps for months if not years. Shingle availability is the worst it has ever been, as well as the labor to install roofing. Shingle companies cannot keep up, and most manufacturers are on tight inventory allocations with long lead times.
#8 are various décor items. Believe it or not, paint is now in short supply. The chemicals to make paint are scarce and there are real shortages in certain lines of paint. Cabinet and flooring supplies are very tight in supply with escalating prices. Selections are limited.
If you want to build a house or construction project, what should you do? Plan your projects early and make sure your home designer is using products that are in stock. Go to the various suppliers to see what is readily available and at all costs, avoid ordering special colors, sizes and specs - you will become very frustrated. Finally, be patient- your project will take longer. As you can see, the problem is much bigger than just lumber and sheathings.
Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Show which can be seen at AroundtheHouse.TV.