Page 20 - BusinessWest June 9, 2021

Construction
Framing the Issue
Price Hikes, Supply Shortages Challenge Construction Industry
Few industries have been immune to the supply shortages and rising costs that have plagued the world economy over the past few months, but construction is especially vulnerable, relying heavily on materials — most notably lumber and steel, but dozens more as well — riddled by soaring prices. The good news is that demand for work is high, but many still worry about the long-term implications of a cost problem with no end in sight.
E
ber and growing demand have created multiple challenges. Orders for lumber that once took a week for delivery now have vague timetables and constantly changing prices.
“Pricing right now is set at the time of shipment, so we don’t know exactly what it’s going to cost us until it’s on the back of a truck,” Boilard said.
Because lumber prices change so often, Boilard and dealers like him study the commodity market every day to make sure they stay current. At press time, an eight- foot 2-by-4, used primarily to frame houses and certain commercial buildings, had increased to $11, up from $4 several months ago, a price hike of 175%.
By Mark Morris
arly in 2020, several lumber mills and steel plants expected demand for their products to take a nosedive once the pandemic hit, so they slowed down or closed some of their operating plants. Instead, after only a brief hiatus in March, home and commercial construction
resumed — and then significantly increased.
For Bob Boilard, vice president of Boilard Lumber, the decreased supply of lum-
20 JUNE 9, 2021
CONSTRUCTION
BusinessWest