Understanding Delays in the Construction Industry and Shortage of Materials

It’s no secret that the construction industry is booming right now. Everywhere you look, there are new homes and businesses being built. While this is great news for the economy, a shortage of materials and labour has caused some projects to be delayed by months or even years.

Learn more about it in this blog.

Restrictions on Global Freight and Shipping

The construction industry is currently facing major challenges due to COVID. This includes restrictions on global freight and shipping containers which are placing constraints for materials like timber. The rise of these two factors have created an imbalance between supply & demand that will take time to adjust before things return back towards normal. So for this year, homes that can be finished within seven months may need nine months before it can be completed.

Limited timber supply

With the recent bushfires, many timber plantations were destroyed. This has created a shortage for building projects throughout Australia and even imported materials are in short supply due to this tragedy.

“It’s also hard to schedule moving forwards as some builders can be waiting anywhere from 22 to 26 weeks for some timber products.

“There are other issues as well with roofing and lots of different types of materials. It’s not just timber.” – CQ Master Builders regional manager, Michelle Traill

Limited steel supply

Steel companies around the world expected that COVID-19 would slow down production. But what actually happened is it sped things up. There were also container availability issues last year and terrible congestion in Sydney port which further impacted delivery schedules.

“When COVID-19 hit, so many steel mills around the world wound back production with the expectation that the pandemic was going to really slow things down.

“But of course, what actually happened is that it sped things up…

“Add to that the huge problems with shipping that are impacting supply, and we find ourselves in a position where steel prices are at all-time highs.” – excerpt from Mitre 10

In the end, Australian builders continue to suffer through one difficulty after another. From a small market size and lack of access on land or by sea, Australian companies are at the bottom when it comes down to the list for steel supplies from anywhere else in the Asia-Pacific region.

The shipping industry is also experiencing a year-long shortage that will continue in the following years. Vessels and containers are not available for purchase as well, which has caused many steel companies to head towards America where they can make more money instead of bringing their product down under.

Here is a list of other supplies where the construction industry is struggling based on Masters Builders Queensland hot topic issue.

SHORTAGE OF LABOURERS and TRADIES

The country is not only suffering from limited sources but a shortage of skilled labour as well.

Carpenters and bricklayers have recently moved up to join roof installers as the most difficult trades to secure. This resulted in delays as getting them on site has been very problematic.

OUR FINAL WORDS

The housing market is a delicate balance of demand and supply. The recent material and labour shortages has caused builders to be more cautious when it comes to signing fixed price contracts.

A few things they are considering include:

1.  land supply constrained by nonexistent demand;
2. labour difficulties due in part from high unemployment rates which make job creation difficult for those seeking positions as well as attracting new candidates; and
3. timber prices were strongly impacted because North American production has been cut back significantly.

All of which are important factors to ensure they won’t lead into cost overruns down the line.

So next time you ask a high quality builder when they think they can start on your project, be more understandable; because they are doing their best to ensure you will live in a home you have always dreamed of.