US President Joe Biden yesterday pledged to tackle construction material shortages that contractors say are driving up unrecoverable costs and causing project delays.
"You can’t reboot a global economy like flipping on a light switch. There’s going to be ups and downs in jobs and economic reports," he said in a speech at a community college in Cleveland, Ohio.
"There’s going to be supply chain issues, price distortions on the way back to a stable and steady growth."
He added: "In the coming weeks, my administration will take steps to combat these supply pressures, starting with the construction materials and transportation bottlenecks, and building off the work we’re doing on computer chips."
He did not specify measures, but industry body the Associated General Contractors of America (AGC) this month called for the lifting of tariffs imposed by former president Donald Trump in 2018 on lumber, plastics and metals, which it says have led to a 19.7% hike in the price of materials across the board between April 2020 and April 2021, the largest such rise in 35 years.Â
Within the construction material category, specific materials have seen much greater rises. According to the AGC, between April 2020 and April 2021, producer price indices have risen as follows:
- lumber and plywood up 85.7%;
- steel mill products up 67%;
- copper and brass mill shapes up 49%;
- aluminium mill shapes up 20.5%;
- plastic construction products up 14.2%;
- gypsum products up 12.1%.
The AGC acknowledged the role of the pandemic and one-time events like the freeze in Texas in February, but said tariffs and quotas on building materials have exacerbated price spikes, supply shortages, and delivery delays.
"The Biden administration must address these unprecedented lumber and steel costs and broader supply-chain woes or risk undermining the economic recovery," said Stephen E. Sandherr, the association’s chief executive officer. "Without tariff relief and other measures, vital construction projects will fall behind schedule or be canceled."
Image: US President Joe Biden speaking this month at Ford’s Rouge Electric Vehicle Center in Michigan (The White House/Public Domain)