ANNE YANNARELLA, EBP Naonal Contractors, Inc.

There is no denying that the coronavirus has affected many facets of our daily personal and professional lives. While the coronavirus's lasting effects are unknown, the virus has caused a significant level of interruption to the construction industry, including contractors, subcontractors, and supply chain vendors. Builders are also reporting substantial challenges finding various important hardware and products and getting those components delivered.

The United States relies on China, Mexico, and Canada for 70% of its building material imports. We are now facing indisputable supply chain disruptions in receiving timber, plaster, drywall, insulation, flooring materials, lighting, electrical materials, elevator parts, fire protection items, steel, and hardware. Shandong Province, which is home to several of China’s largest aluminum manufacturers, also produces more than 90% of the world’s collated roofing nails. Other significant materials and product suppliers, such as Japan, Lithuania, Germany, Spain, and Italy, have also been harshly affected by the coronavirus outbreak, which has added to the United States' construction materials and components troubles.

20 January | February 2021

According to an article published by the law firm Brooks-Pierce, in addition to labor shortages and financial burdens, one challenge impacting ongoing construction projects is the difficulty in getting needed building materials on time. At the height of coronavirus shutdowns in the spring of 2020, many producers of building supplies that were not deemed “essential businesses” by their local governments either closed their offices entirely or reduced their staffing and capacity to help support social distancing efforts among employees. This has led to a shortage of numerous supplies and ongoing supply chain issues.

In June, the Associated General Contractors of America found that “25% of contractors were experiencing project delays or disruptions due to a shortage of construction materials, equipment, or parts. These delays can impact the scheduling of a construction project by days, weeks, and months. Furthermore, 38% of respondents said suppliers had notified them or their subcontractors that material deliveries would be late or canceled.”

The supply of building materials in the Northeast reflects what we see nationally. Suppliers are waiting on new stock; their inventory is

exhausted, and available stock is selling at premium pricing. Lumber prices peaked at a record high of approximately $950 per thousand board feet in September 2020 before gradually shifting down to about $550 per thousand board feet in November 2020. According to Random Lengths, December 9 lumber prices were above $650 per thousand board, up nearly 20% over the previous four weeks. With the building materials supply unable to satisfy the demand by contractors, prices and lead times have surpassed what they would be in a regular market. Contractors are now experiencing 6 to 12 weeks of lead time on various building materials and products.

On December 3, 2020, the United States Commerce Department made the decision to reduce its duties on Canadian lumber shipments into the U.S., down to 9% from more than 20%, in response to extreme lumber price volatility. Chuck Fowke, Chairman of the National Association of Home Builders, stated, "The Commerce Department's action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done. Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading

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