Labor, Material Shortage Leading To Construction Delays

Published: Friday, June 4, 2021 - 3:31pm

According to a new data analysis, construction firms are reporting difficulty finding workers while the costs of materials steadily increases. The combination of factors is causing significant delays in the residential construction market.

An analysis from the Associated General Contractors of America says the industry is struggling with access to building components. Roofing materials are taking four to six months while contractors can expect to wait on shipments of steel for up to a year.

Mark Stapp, director of Real Estate Programs at the W. P. Carey School of Business, says the booming Valley housing market is no exception.

“Some builders are writing contracts with home buyers that give them as much as two years to build their home,” he said. That’s double the average time.

Stapp says tariffs have had an effect on material cost but the supply chain has been greatly disrupted and the marketplace hasn’t recovered yet. He says large companies like Amazon are adding to scarcity by pre-buying raw materials in huge quantities. Stapp also cited two major commercial developments from Intel and TSMC in the Phoenix metro area that will add to the shortages.

"They are going to consume tremendous of labor and material," he said, "and that will exacerbate matters for all other smaller projects.”

Stapp says despite the delays, the relatively low cost of borrowing has allowed the housing development market to continue to grow.

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