DAYTON, Ohio (WDTN) – Since the start of the pandemic, everything from groceries to gasoline have gotten more expensive. Experts say the cost of construction has been heavily affected as well and supply chain issues have even caused delays in construction speed.
Tom Snapp, senior vice president of Ferguson Construction, said over the course of the pandemic the industry has seen plenty ups and downs but the cost of inflation became incredibly noticeable around October 2020. He said the cost of raw materials became significantly more expensive, with the cost of steel making a huge leap.
“[The increase in price] started out at 10 or 15 percent, but they increased pretty consistently throughout the year,” Snapp said. “Right now, I would say on average, just in general, the price you’re paying for steel is probably about twice what it was in October.”
He said the price of that increase largely has to do with the work it takes to produce the steel.
“Depending on how [many] man hours or manpower is used in producing — for example, if it’s rebar or mesh — there’s relatively little manhours in there. So it’s not diluted by the fact that labor has not gone up nearly as much. So when you see commodities that don’t have much manhours involved in the production of it, the prices are much more increased, and when it’s diluted by more man hours, you don’t see as steep a rise. “
Not only have the price increases contributed to issues in construction, but delays in production have also caused the rate of the building to slow, in some cases, causes business to slow the speed of their projects.
“Depending on the type of building and whether or not it has a tremendous amount of engineering involved in it, you can see anywhere from a 24 to a 32 week delivery on buildings, where as normal would be about 10 to 12 weeks.”
And while Snapp said he specializes in commercial and industrial projects, home builders are not exempt from the increasing costs and delayed timelines.
“What tends to happen a lot of the time is that commodities are kind of based off each other. Say for example, a commercial, industrial type of facility, a lot of the construction is non-combustible material, meaning steel, studs as opposed to wood studs. So in a commercial or industrial building, you can’t use any combustible products, such as wood, compared to residential,” Snapp said.
The present issue, Snapp explains, is two pronged — some of it is pandemic related and some of it has to do with a market economy.
“So if steel studs go way up because the cost goes up, wood will follow that as well, just because it’s a substitute in a lot of places,” Snapp said. “So if you can go to wood and still get the job done because it’s so much cheaper than steel, if code will allow that, then it’s an option. But wood [suppliers are] going to take advantage of that. They’re going to look at it and go: ‘Okay, steal prices have gone up, so wood prices can go up as well.'”
Snapp said this has caused a slow down in building rates, and some organizations are even stalling their projects until prices go back down. But with some many individuals and business being impacted by inflation, he said the good news is that people have been understanding of the process.
“One of the things I’ve found that has been pleasantly surprising through all of the COVID pandemic stuff, is that people have been generally very understanding of situations when [they] encounter them, because everybody’s encountering it in some form or another in terms of, ‘okay supply chain management has been very difficult, [so] we have to wait for [progress].’
Snapp said as of now, prices for materials are expected to start going back down in the spring.