Rising Construction Costs No Laughing Matter
Updated: May 6, 2021
You have heard the jokes and probably seen the social media memes about the rising cost of construction materials, particularly plywood and OSB, but as many in the construction industry will tell you, the increase is no laughing matter, and it’s not just lumber getting expensive.
Like so many aspects of the economy, the arrival of a pandemic has caused disruptions and chaos in all areas of the construction industry, from the cost of basic building supplies, to the availability of appliances and finishing materials. Wait times for materials are unpredictable and contribute to what in some cases can equal almost a 50 percent increase in costs since last spring. Many construction basics are seeing weekly price increases, with no end in sight. There can also be up to seven months delay in some appliances.
How did supplies get so expensive? Two factors are mainly responsible for this situation. When COVID slammed the globe last spring, production in most industries slowed or downright stopped. Those sectors that could stay in operation had to do so at a highly reduced production rate, due to social distancing on factory floors and enhanced cleaning measures required. Second, people decided to renovate their homes in record numbers. Decks were built/rebuilt, rooms expanded, home offices constructed and basements finally finished, so basic economic supply and demand scenarios kicked into full gear, if you wanted a product, it was going to cost you to get it! In some areas of the country, this is causing upwards of an extra $30,000 in new house construction.
Unfortunately, no one knows when this will change. It is predicted that until some of the pandemic is contained, and health restrictions are lifted the economic impacts will continue to increase costs and diminish supply. Even after that, chances are prices won’t drop to pre-pandemic amounts, once inflated prices set in, very rarely do they disappear!