Shortages of building materials and rising costs hit North Jersey

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NORTH JERSEY – There are only a certain number of times in most people’s lives when they would be interested in the cost of lumber or other building materials. So, for those who are not yet aware of the challenges facing the construction industry right now, let’s start here:

The price of building materials has reached record highs, causing material shortages and delays in construction projects.

This information comes from the latest Bureau of Labor Statistics Producer Price Index Reportt, and shows that the price of building materials has increased by more than 19% in the last 12 months.

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This fact contrasts sharply with the trends and annual averages of the last decade, and is even more shocking when you consider that prices have climbed almost 20%. even after a decline in framing labor prices in recent months, writes the National Association of Home Builders.

But don’t confuse this price drop with a sign of relief, as building material prices have only fallen twice since December 2019. And it’s not as if the drop really helped those who were faced with rising costs.

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David Logan wrote in the NAHB blog “Look at housing“that the producer price index for softwood lumber fell 29% in July. This is the largest monthly decline since lumber tracking began, but the product remains still nearly 72% above the January 2020 level.

The NAHB sent out a survey to builders in May, seeking their comments on this price hike. According to the survey results, most indicated that the materials to build the same house increased by an average of 26.1% compared to June 2020.

Almost none of the respondents – 3.1% – said prices had increased by less than 10%, and some manufacturers even reported that costs had increased by 50% or more.

The organization has included this question six times on the questionnaire since 2012, the NAHB said. As you may have guessed, this increase is the largest on record, handily beating the previous high of 6.1%.

And the problem is felt at almost every level of the supply chain in North Jersey, from independent contractors to your neighborhood hardware store.

Chris Jeffrey is the manager of Marsala Hardware on Broadway in Hillsdale. Reached by phone on Friday, Jeffrey said the store was understaffed with other employees on vacation, but his succinct observation detailed the problem perfectly.

“Everything has gone up, and I can’t get anything,” he said.

But why is this?

Speaking to Asbury Park Press, Rudi Leuschner, professor of supply chain management at Rutgers Business School in Newark, explained like this:

“When you think of a product that will end up in a retail store or a contractor, that product until it gets there changes between many hands,” he said. “And at every step of that process, there’s a chance it’s going to be delayed, or there’s a chance it’s getting stuck somewhere. And then all these little things add up to bigger delays and larger failures, etc.”

These shortages and the lack of products on store shelves should be familiar to anyone who lived in North Jersey at the start of the coronavirus pandemic, when toilet paper and groceries were hard to come by.

Some of these delays can be attributed to shipping delays, further exacerbated by shortages in other industries, including a shortage of truck drivers.

Also speaking to APP, Professor Sanchoy Das of the New Jersey Institute of Technology explained that normal operations of shipping and movement of products were beginning to resume after companies ceased operations in the first days of the pandemic. But there is little that these industries can do to speed up the process.

“Shipping lines went to almost zero for a while and now they’re suddenly booming. The number of ships is sort of fixed. You can’t build a ship overnight.”

And it’s not just contractors and hardware stores feeling the impact of this time of logistical difficulties.

Wayne Public Schools Superintendent Mark Toback said the district is having difficulty with its transportation service due to the nationwide shortage of drivers in the transportation industry.

This affected the bus lines in the neighborhood, of course, but also caused difficulties in another area.

“The driver shortage issue across all industries influences many things beyond the daily transportation we provide for our students,” Toback said. “The shortage of delivery drivers means that our food service provider, Sodexo, is not receiving the food products it has ordered from Sysco, their food supplier.”

We do not yet know how quickly the market can regulate itself. Toback noted that media coverage has helped the district find interested bus drivers, but it’s an incredibly small sample.

However, another industry snapshot will be available this month, as the September producer price index is set to be released on October 14.

Until then, heed Chris Jeffrey’s warning before planning your next home improvement project.

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