The Kink in the Supply Chain

suez-canal-chain-disruption

Have you noticed that your construction projects are on hold or prices are coming out higher than anticipated? You’re seeing the effects of a supply chain disruption. Maybe you’ve seen the memes and articles about the Texas winter storm and Suez Canal blockage, but what do these things mean for you? The disruption in the supply chain has been exacerbated by many unexpected challenges and has impacted many areas of supply and production.

What’s Causing the Supply Chain Disruption? 

The global pandemic, the blocked Suez Canal earlier this year, and the winter weather that hit Texas have disrupted the supply chain significantly. The prices of building materials have skyrocketed. Wood prices have substantially increased, presenting many issues for contractors and their clients. The National Association of Home Builders says that lumber prices have increased more than 300% since April 2020. This makes it difficult for new home builders to afford to continue building. In addition, renovation or repairs will also be a pricier endeavor.

 

Plastics and resins have been affected as well. The raw materials used to create these products have had many constraints due to COVID-19 and the other unexpected disasters. This has led to factory shutdowns, price increases, and delays in production. In the construction industry, these shortages impact jobs. The materials needed to create products such vinyl siding, PVC boards, plumbing pipes, and lumber are in high demand, and supplies are low. When this happens, contractors are unable to get the products they need to complete a job and, if they can get them, the prices will be much higher than many clients are expecting to pay.

These shortages were further impacted by the winter storm that hit Texas this year, causing the world’s largest supplier of plastic to stop production, and it may take up to 6 months to catch up to demand. The Suez Canal blockage didn’t help matters, causing additional disruption in the supply chain that could last for months.

 

Local construction companies rely on basic materials that are sourced from global manufacturers. Contractors are looking to purchase tiles, flooring, siding, and other products locally, but they are often unavailable or in very low supply compared to the high demand.

What Does This Mean for My Projects? 

Prior to the pandemic and other disruptions, materials could be ordered and arrive within a few days. Now, contractors sometimes have to wait a month or more for higher-priced materials. Proceeding with a job now, means it will take longer, and you’ll pay more. Many contractors are scheduling jobs later in the year to account for the wait time and in hopes of seeing lower prices.

Trusted construction companies like Hedrick, are working hard to get the best prices and timeline for your projects, but much is out of their control. The disruptions in the supply chain affect consumers on many levels. If you’re starting or trying to finish a project, understand that it will require patience.

Comments