Concrete Crisis: Is It a Bigger Threat Than Soaring Lumber Prices?
Download MP3Episode Show Notes:
- House prices and new home construction delays aren't just about one factor — they’re affected by materials, labor, and supply chain issues.
- Material inflation is widespread, affecting lumber, roofing, and especially cement.
- The cement industry is facing a “triple whammy” of rising demand, labor shortages, and supply chain disruptions.
- Cement demand surged as projects resumed after pandemic slowdowns, with new homes, commercial buildings, and municipal projects all competing for supply.
- Many concrete plants reduced staff or shut down during the pandemic, pushing workers to leave or retire, leading to labor shortages when demand returned.
- Even as construction ramps back up in 2022 and beyond, plants can’t meet demand due to labor and raw material constraints.
- Shortages in Portland cement, sand, and aggregates add more pressure, forcing builders to pay higher prices or delay projects.
- The labor shortage includes not just plant workers but also drivers with specialized licenses to deliver cement.
- Any weak link in the concrete supply chain causes widespread delays and price increases.
- Example: A small project needing just a few yards of concrete saw prices double, leading to postponement and adding to the backlog.
- Even as concrete is eventually used elsewhere, the overall backlog of construction projects keeps growing, not shrinking.
- Inflation pressures aren’t going away soon; backlogs in goods like vehicles, chips, construction materials, and homes continue to build up.
- Labor market constraints and material shortages mean production can’t catch up quickly enough to meet rising demand.
- Builders have even canceled home contracts last minute to resell at higher prices, partly driven by rising construction costs.
- Instead of waiting for prices to fall, it may be smarter to plan for 7–9% annual inflation in most goods and adjust project timelines and budgets accordingly.
- As a consumer or business owner, it’s important to understand these market forces when planning future purchases or projects.
