Due to the pandemic and severe weather issues that have plagued the country in the year 2020, many common construction materials have seen massive increases in prices as supply has dropped. These construction industry trends have affected operations at Stronghold and across the country.

Additionally, these crucial supplies have been delayed from arriving at their destination due to conditions like those the nation’s freight lines faced; many of the freight lines either weren’t running, or they were running short crews. Shutdowns and understaffing were common in almost every industry.

This unexpected combination of difficult circumstances made it hard for manufacturers to recover, even with the backlog of stock they typically carry in case of events like these. What was expected to be a 2-month delay turned into a dramatic disparity between supply and demand that the construction industry hasn’t seen since the recession in 2007.

PVC, copper, steel, concrete, cement, all experienced similar trends in 2020. In April 2020 soon after the onslaught of tornadoes in the Gulf where PVC is manufactured, PVC prices started escalating rapidly. Similarly, copper and steel began following PVC’s upward trend in the fall of 2020. Copper wire that would have cost $86.53 per 1000 feet in April 2020 cost $152.88 per 1000 feet a year later.

Stronghold’s tracking of all its materials over the last year shows a 41% increase in prices across the board.

Force majeure clauses are often included in contracts that lets either party off the hook, no liability or obligation, should extraordinary circumstances beyond the control of the parties disable them from following through. Many of Stronghold’s suppliers had to evoke force majeure when they found themselves unable to deliver promised supplies at agreed upon prices. In turn, Stronghold had to revisit some contracts that were already in place before material prices spiked.

However, due to the industry’s heavy emphasis on planning and the team’s efficient preparations, Stronghold didn’t have to push force majeure in all of their work. The company had many projects lined up, a backlog of materials pre-ordered, and a strategy for recovering costs that allowed them to escape much of the immediate impacts of the spike in material prices. 

While there were longer-than-typical waiting periods for supplies and many negotiations with suppliers wanting to increase agreed upon prices, the Stronghold team was patient and held firm. They were able to continue work on projects like the Sierra College Infrastructure Upgrade in Rocklin, CA, and the Air Traffic Control Tower in Palmdale, CA, despite the difficulty in procuring supplies at reasonable prices.

Prices are expected to continue increasing, but not on par with the speedy escalation that 2020 saw. Two factors will determine when material pricing will plateau or drop:

  1. How quickly the country opens up and the economy recovers.
  2. The severity the future tornado seasons will be in the Midwest.

As the country continues to recover and construction industry trends settle into a new normal, Stronghold will continue offering stellar services to its clients. For more information on how Stronghold succeeded during the pandemic, visit our blog.