Thanks to the current White House resident, the US construction industry is rolling through a perfect storm of construction material price spikes that some might think is an intentional assault on what would otherwise be a thriving economic sector.
Already depressed by the government overreach that culminated in the Covid 19 industry shutdowns of 2020, Biden’s pipeline politics are throwing fuel on the construction industry fire in 2021. And profits for projects are going up in smoke.
The Biden administration’s “rush to green energy”, an outright attack on fossil-fuel based infrastructure and essential consumer supply chains, is kicking construction material prices right through the roof. Because of that not many residential roofs will get built in the remnants of a turbulent 2021, an uncertain year where reckless green-leaning pipeline politics have jacked up diesel costs by a whopping 80% and put a slew of pre-bid construction projects on hold.
Diesel fuel is the essential link that makes the supply chain go smoothly, so nobody is off the hook when it comes to construction materials delivery. Or any other economic staple for that matter. Sooner or later everything moves by truck, and Jeff Bezos’ all-electric fleet of 100,000 vans is far from ready to take on the task.
Let’s take a look at the ripple effect caused when pipelines are replaced by billionaire and Biden pal Warren Buffet’s handy rail system, one that triples the cost of transporting a barrel of any fuel, whether gasoline, diesel, or crude.
- Lumber prices skyrocketed to record levels. The Random Lengths lumber trade tracking group reports “ As of late April, lumber prices were up 67% from the beginning of the year and a massive 340% higher than one year ago, according to Random Lengths, a tracking firm for wood products.”
- Gasoline prices are the highest for a Memorial Day holiday weekend since 2014.
- Gas Prices are expected to range around $3 and stay up at that level throughout the summer. After enduring lockdowns in 2020, pent-up travel demand is expected to motivate Americans to get on the road and resume normal driving vacations and driving demand even higher.
- Steel prices jumped by 11%. Maybe that’s the case out in Mankato Free Press territory, but the rest of the nation is seeing even higher steel price increases across the board, according to the National Association of Home Builders. That’s going to make those “green” resource ravenous wind turbine farms favored by the “blinded by the green” Biden administration even more costly. Last March, steel products topped the 2018 high mark record when prices increased by 17.6%. Steel and other construction materials prices are more volatile now than at any time since the Great Recession.
- Gypsum products increased by 2.1% in March, but this offsets the 1.3% decline seen in February. The PPI (producer price index) for all gypsum products has increased 6.3% over the past 12 months while the index for gypsum building materials such as common drywall is up 6.6%.
- All of the disturbing numbers above has the Association of General Contractors (AGC) issuing their cautionary statement for builders who are still catching up with their Covid 19 shutdown backlogs;
“Given that [construction] materials often represent half or more of the cost of a contract, such an increase could easily wipe out the profit from a project and potentially put the contractor out of business,” the AGC warned, referring to contractors who had made bids before the rapid jump in prices… Since then, numerous materials have risen even more steeply in price.” Free Press of South Central Minnesota
A Better Forecast For Civil Engineering Projects
Amidst the long column of 2021 price spikes that continue to set records on the NAHB graphs, there is some good news for the civil engineering infrastructure sector of the industry. Ready-mix concrete prices have stabilized after a 2% spike last September, and asphalt and tar products are showing the lowest increases at under 5% in the last 12 months and just 2% or so year-to-date.
So civil paving jobs aren’t quite feeling the punch that has the residential construction sector reeling back on its heels. But that doesn’t mean that all civil projects are immune to the Biden pipeline killer effect. Especially if they involve lumber or steel, such as for bridges.
If we go back to small town Minnesota, a rotting bridge over Mankato’s North Minnesota River Trail provides us with the perfect case in point for demonstrating the sticker shock faced by municipal infrastructure funders managing taxpayer budgets;
“In February, a $325,000 bid by S.M. Hentges & Sons to demolish and replace a rotting bridge on Mankato’s North Minnesota River Trail was 80% above estimates. Two other bids were more than double expectations and one was more than triple. That same month, plans to complete the second phase of improvements to the fuel facility at the Mankato Regional Airport were shelved after just two bids were received and both were more than twice what was expected.” Mankato Free Press
Just 2 bids? The industry watchers at Resource Erectors aren’t surprised. We know from decades of working with the best of them that civil engineering contractors who crunch numbers as a profession aren’t the most likely candidates for giving away the store.
Engineering and Construction Materials Careers With Resource Erectors
When our associated heavy industries are under political attack we take it personally at Resource Erectors. That’s because we’ve been working with the industry-leading companies that build our infrastructure and mine our essential life-sustaining resources for decades. We specialize in recruiting hard-to-find skills and talent among the best professional engineering and management candidates in civil construction, mining, aggregates, concrete, gypsum products, and more.
Whether you’re building your next dream team or you’re ready to take your career vertical with a better paying job more suitable to your experience and qualifications, Resource Erectors has the heavy industry connections you need in the US, Canada, and Australia. Over 85% of Resource Erectors candidates placed are still happily contributing to the success of their companies today.
When you’re ready to put the specialized human resource expertise of Resource Erectors to work for you please don’t hesitate to contact us so we can all get to work.
