The country is trying to bounce back after the pandemic and it seems like prices keep going up.
Pricing for housing, gas and even food has increased across the country. So, why are construction costs increasing? Increased costs are mainly due to a supply shortage, which also causes construction delays.
Supply Shortage
The decline in the availability of lumber and other building materials has led to delayed projects. When supplies are not available the cost becomes much higher.
The cost of building homes has also increased all over the country. Some places are worse than others, but the majority of homebuilders have been having a difficult time getting a loan.
This is all due to the higher cost all over the country for materials. For example, the price of lumber is 300% higher than the 15-year average price. Deliveries are also delayed, making the construction project delayed.
The Impact
Because of the supply shortage and expense in materials, homes being built are at a 20% higher cost compared to homes last year. Even though it is the responsibility of the homeowner to pay for these extra costs, it really impacts smaller builders, which make up two-thirds of the homebuilding market. This is usually a thriving industry.
When you are involved in a construction project and you are dealing with contracts and price escalation clauses, which are needed during this time of increased supplies, you should always make sure you are talking to only the best construction lawyers in Phoenix. They can help you get in a habit to start including price escalation clauses.
There is no way to fully predict when you could see the price increase in materials and supplies and you never want to be the one paying the extra price as the builder. It should always be the responsibility of the homeowner to pay for the price in fluctuation. A construction lawyer will help you get everything squared away so that your small building business is not hit with the extra costs.
Labor Shortage
In addition to a supply shortage, the construction industry has also been hit with a labor shortage. Even during the pandemic, companies were struggling to find workers. The problem has lingered into 2021. However, the construction industry always seems to be looking for workers since there are always so many projects in the works.
And more workers mean the job will get done faster. The problem is that workers need to be properly trained to get the job done right too, not just quickly. Finding workers to take the time to get properly trained is not easy. Also, finding reliable workers has been another struggle for those in the construction industry. In a fast-paced industry that is on crucial deadlines, contractors need to be assured that they can rely on their workers to show up on time.
With the country opening back up after the pandemic, more construction projects will be popping up, which means more construction workers will be needed. The good news about working in the construction industry is that it is a steady job. You will always have work.