BLOG: Home construction projects hit by price rises and supply shortages
This post explores why prices are on the up and why you might need to rethink taking on any home improvement decisions any time soon.
The lack of supplies and increased prices can be traced to:
Increased home renovations and building activities as a result of lockdown
Before we can talk about the inability to produce more supplies, we must first examine how the supplies got used up in the first place. The chief reason why supplies ran out on the shelves is a startling increase in home renovations due to the Covid-19 lockdown.
Many people needed to make changes in their homes to make them safer for themselves and their families. As the lockdown eased, corporate bodies were required to make structural changes to reflect social distancing. The pandemic home remodelling boom and the increase of custom homes construction were the initial steps that set the course for the supply shortage experienced.
The demand for building materials is through the roof
It is one thing to be short on supplies, but if the demand were equally low or, at best, average, companies would be able to manage the situation. However, the reverse is the case as manufacturers are currently experiencing an unprecedented demand for manufacturing materials. Some of the affected materials include, but are not limited to, the following:
- Roof tiles
- Paints and Sealants
- Plaster and plasterboard
The strain on the supply chain
The pandemic did not only cause an increase in home renovation, it put many people out of jobs as companies had to cut workers off their payroll to keep their businesses afloat. Forbes reported that 60% more people were without jobs for more than six months than before the pandemic.
This destabilised the supply chain of many organisations. An example is the shortage of lorry drivers that caused manufacturing companies to deliver supplies late and, in some cases, unable to go through with the delivery.
Increase in shipping costs
The travel restrictions as a result of the Covid-19 pandemic saw shipping costs soar to a record high. The speed the economy tried to return to normalcy was not without problems as it caused a shortage of shipping containers.
These factors combined brought about an astronomical price change that, as an example, can be felt in the price it takes to ship a 40ft container from Asia to Northern Europe, which sits at about £5,900 ($8,400). This fee is mind-boggling, especially when you consider that the price to ship that same container across the same distance was only £1,000 ($1500).
Impact of weather on production
The Covid-19 pandemic cannot be entirely blamed as the weather has contributed to the scarcity and costliness of building supplies. The production of polymer, plastic and other chemicals has been affected by Texas’s colder winter weather. Also, Scandinavia is struggling to keep up with its standard timber output because of its warmer winter weather.
When will things return to normal?
While things have gotten better compared to how they were some three to four months ago, research shows that prices will remain high, and we will continue to face supply issues for the next seven to nine months.
How to navigate the shortages
The key to navigating the shortage and weathering the storm is proper planning and effective communication with distributors. Suppose you cannot wait for things to return to normalcy. In that case, you should plan all your building projects ahead of time and inform your suppliers many months ahead so you won’t have problems with either sourcing or delivery.