The Q4 2020 numbers were released from the U.S. Chamber of Commerce Commercial Construction Index and reported that the number of material shortages was growing at an alarming rate, primarily due to the pandemic.
The Index measures the survey results reported by construction companies and contractors. This quarter, contractors reported that there was a marked increase in material shortages and that they believed this was linked to coronavirus. 41% of contractors stated that material shortage is “severe,” up from only 15% saying the same in the third quarter. 71% of contractors say that they are experiencing at least one material shortage, up from 54% in Q3.
The most-reported shortage is lumber, which is attributed to both the pandemic contraction in the supply chain and the boom in residential construction, which uses more wood than commercial. The current number is at 31% experiencing shortages of lumber, compared to 11% in Q3.
Of the contractors reporting shortages, 89% say it’s having a moderate to high level of impact on their business.
The Index states that while the contractors’ outlooks are not improving, they are stabilizing. Contractor confidence increased by one percentage point, revenue expectations went up by four and backlog rose by two.
“The pandemic has exacerbated issues contractors were already facing in availability and cost of materials from tariffs and a shortage of skilled workers,” said U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley. “But there’s reason for optimism. More than one in three contractors plan to hire more workers in the next six months, and most see sufficient new business in the coming year.”