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Disruptions in construction supply chain cause higher prices

Published: Apr. 26, 2021 at 6:51 PM CDT
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LINCOLN, Neb. (KOLN) -COVID-19 has caused a disruption in the construction supply chain. Costs are increasing and production has been delayed.

Now the Lancaster County Engineer said they’re anticipating material shortages, which could impact projects this summer.

It stems back to the beginning of the pandemic when many plants shut down, and construction continued on. Now demand has outstripped supply and construction material prices are expected to continue rising.

“300% increase on steel products,” said Pam Dingman, Lancaster County Engineer. The county’s trucks have been limited to only hauling 5 trucks of rocks a day. The price of aluminum signs and sign posts has more than doubled and lumber prices have shot up, too. The cost of materials rising is a problem across the board.

“The base of this is a production issue,” said Dingman. “We created an on-demand system and that’s not what our world is anymore.”

The county ordered materials last August, but it is expecting to run into issues with materials this summer.

“That next round of purchasing is going to be difficult,” said Dingman. “Unfortunately, we might not make it all the way through this price surge.”

COVID isn’t the only thing slowing projects down, striping paint for roads has been delayed too. A road paint manufacturer in Texas saw a delay in production during the cold snap earlier this year.

“Their plant froze up,” said Dingman. ”Ther is a shortage of paint across America.”

While there is annual construction inflation, Dingman is expecting this to be worse.

“Expecting to see inflation in double digits,” said Dingman. “Normally it’s around 5%.”

It’s unclear just how long this price increase will go on, and unclear how many projects will impact in the future.

“Don’t know how many projects delayed or how much it is expected to increase,” said Dingman. “We expect fall project bidding to increase.”

Lincoln Transportation and Utilities also said that they’re expecting increased project costs.

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